What is Planned Giving?
One of the
greatest ways you can help protect the Hudson Valley is to support
Winnakee Land Trust’s work beyond your lifetime. Planned gifts make that
possible. There are many ways to include a generous future gift to
Winnakee Land Trust in your plans, each with unique benefits to you, the
donor. All forms of planned giving help Winnakee Land Trust carry on its
mission of protecting and preserving northern Dutchess County’s open
spaces and natural beauty forever.
Planned gifts
are so named because such gifts must be carefully planned as part of the
donor’s overall financial and estate planning. You may want to consult
with a financial advisor or legal counsel when making a planned gift, as
Winnakee Land Trust is not engaged in rendering legal or tax advisory
services.
Wills and Bequests
The most
frequently used planned giving instrument is the will, a device that has
been around hundreds of years. Each individuals exercise their right to
determine how the estate they have spent a lifetime accumulating is to
be finally distributed. Through your will, you may specify the assets
you would like to leave Winnakee Land Trust by creating a bequest. Then,
after your lifetime, your estate can take a charitable deduction for the
full amount of your bequest. Depending on the size of your estate, this
can result in substantial tax savings.
Winnakee Land
Trust accepts almost any kind of asset through a bequest, including
cash, securities, real estate, or retirement plans. A bequest is
deductible for federal estate tax purposes, and there is no limit on the
amount of the estate tax charitable deduction.
Bequests
-
Are
created in a will or revocable trust
-
Offer
unlimited charitable estate tax deduction
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Provide
continued use of assets during your lifetime
-
Are
flexible—you may increase or decrease the amount at any time
-
No
minimum amount
-
Allow the
satisfaction of knowing your commitment to the Hudson River Valley
continues after your lifetime
-
Can be
conveniently added with a simple codicil to your will rather than a
revision or rewriting of it
Suggested Language for Bequests
“I give
[specify amount or property, percentage or residue] to Winnakee Land
Trust, Inc., a not-for-profit corporation, chartered in the State of New
York, located at 7015 Route 9, Rhinebeck, New York 12572 for its general
purposes.”
If you’re
planning to make Winnakee Land Trust one of your beneficiaries, we
encourage you to tell us now. We can work with you or your advisors to
make sure the bequest is planned and administered properly. It also
gives us the opportunity to thank you and recognize your gift. Requests
for anonymity are always respected.
Life Insurance Policies
Consider
gifting a life insurance policy to Winnakee Land Trust. If you no longer
need all the life insurance coverage you purchased years ago, you might
think about it as an asset you could give to Winnakee Land Trust. This
is an easy way to make a large gift with little cost to yourself.
Benefits
Save taxes
this year if you transfer ownership of a policy that has a cash
surrender value
If you
continue to pay the premiums, those payments are deductible as
charitable gifts
Remove the
value of the life insurance from your taxable estate
Or consider
naming Winnakee Land Trust has the beneficiary of your policy, while
maintaining ownership. No income tax deduction is allowed, but you
retain the right to change your mind during your lifetime. You will also
receive membership in our planned giving society, the Hudson River
Stewards, for this most significant gift.
Retirement Funds
Whether you
participate in a company pension plan or a fund you have established
yourself, such as an IRA or a 401(k), you may find you’ve accumulated
funds beyond your needs for comfortable support of yourself and loved
ones.
Retirement
funds may be subject to two forms of taxation. Generally, the
undistributed balance of qualified retirement plans is fully includable
in your gross estate for estate tax purposes. Since the funds in
retirement accounts usually represent deferred compensation that has not
been subject to income tax, giving the accounts to individual heirs
exposes the funds to income taxes. Your retirement dollars can be
seriously depleted by this double taxation. When Winnakee Land Trust is
named as the beneficiary, you can avoid both forms of these taxes.
Benefits
-
You have
the use of your retirement savings during your lifetime
-
This form
of a gift is revocable and can be changed if your financial
circumstances change
-
The
ability to leave loved ones other assets that carry less tax
liability
-
The funds
you carefully saved over a lifetime may ultimately be used to defend
and protect the Hudson River Valley
Charitable Remainder Trusts (CRTs)
A CRT is an
irrevocable trust that allows you to make a deferred charitable gift and
receive an income tax deduction in the year in which the trust is
established. A CRT actually provides for and maintains two sets of
beneficiaries. The first set are the income beneficiaries (you and, if
married, a spouse). Income beneficiaries receive a set percentage of
income for your lifetime from the trust. The second set of beneficiaries
is the non-profit you name. They receive the principal of the trust
after the income beneficiaries pass away.
Capital Gains
Because their
assets are destined for a non-profit, CRTs do not pay any capital gains
taxes. These taxes can range from 10% to 20% of an asset’s growth in
value. For this reason, CRTs are ideal for assets like stocks or
property with a low cost basis but high appreciated value.
Income and Estates Taxes
A CRT is
considered “outside of your estate” by the IRS. Because of this, you may
end up saving as much as 48 cents of every dollar you move to the CRT.
Because CRTs benefit a charity, you also qualify for an income tax
deduction. The amount of your deduction is the present value of the
remainder interest to the charity.
The Pension Protection Act Expires Dec. 31, 2007
In 2006,
Congress took important steps to strengthen America's retirement system
while also encouraging additional charitable giving. The Pension
Protection Act of 2006 may offer you new opportunities for tax-free
charitable giving.
Of special
note, the new law includes incentives for those 70.5 years of age and
older who would like to make charitable gifts from potentially taxable
Individual Retirement Account (IRA) funds. For 2006 and 2007 only,
Congress is allowing individuals 70.5 and older with traditional or Roth
IRAs to make tax-free gifts directly to qualified charities, avoiding
tax liability on withdrawals made during ones lifetime as well as estate
tax if IRAs are left to loved ones other than a spouse. Individuals who
are required to take unneeded IRA withdrawals, and others who have
experienced limitations on tax benefits in the past, will find this law
of particular interest. This congressional act expires on December 31,
2007.
More Information
See if one of
our tax-deductible planned gifts is right for you. To learn more about
how you can make a lasting investment in our valley, please contact Lucy
Hayden at 845-876-4213 or e-mail
director@winnakeeland.org.
