Planned giving can benefit you, your loved ones, and the fight against Parkinson's. That's because a thoughtful planned gift enables charitable donations at a level that you might not have thought possible, while maximizing tax benefits for you and your family.
A properly drafted will or other planned giving devices can minimize estate settlement costs and taxes, ensure that your property is managed the way you want, and provide for your spouse, children and grandchildren. But you may be surprised to learn that your will can also be a flexible way to help keep the critical work of The Parkinson’s Institute and Clinical Center moving forward after your family's needs have been met. There are many ways different ways to incorporate planned giving.
Life Income Plans
Life income plans are a sophisticated and flexible way to make a gift over a period of years while providing income for you or your beneficiary. Naming The Parkinson’s Institute and Clinical Center as the recipient of such a gift can help you qualify for an immediate charitable tax deduction, reduce your estate tax, avoid or reduce capital gains tax, and give you the satisfaction of contributing to the fight against Parkinson's. Some of the most popular life income plans are:
• Charitable Lead Trusts
These are created by irrevocably transferring income-producing assets (cash, stock, other assets, or a combination of these) to The Parkinson’s Institute to be managed and invested. The income from these assets (either a fixed dollar amount or a fixed percentage of the trust principal as revalued annually) is paid to the The Parkinson’s Institute for a specified number of years. Upon termination of the trust, the remaining trust assets, including any appreciation in those assets, pass to you or your designated beneficiaries, with little (or no) gift taxes. During each year of the trust, it receives a charitable income tax deduction for the amount of that year's income paid to The Parkinson’s Institute from the trust. Additionally, because the trust assets are removed from your estate, they are exempt from estate taxes.
• Charitable Remainder Trust
This is established by irrevocably transferring income-producing assets to The Parkinson’s Institute to be managed and invested. You or your beneficiary will receive income payments for life or a period of up to 20 years, at the conclusion of which the trust's remaining assets will transfer to The Parkinson’s Institute for its general use or use as specified by the terms of the trust instrument. Depending on how the trust is invested, the payments to you or your beneficiary may consist of ordinary income, capital gains income, tax-free income, or return of principal. Regardless, you are entitled to an immediate charitable income-tax deduction of the projected value of the "remainder interest" at the time the trust terminates. If appreciated property is used to fund the trust, you can reduce or eliminate capital gains tax on the appreciation.
• Charitable Remainder Unitrust
A unitrust can be established during your lifetime or in your will, and is a versatile option that can supplement retirement funds, create education funds or financial support for a beneficiary, or help you accomplish other individual objectives. It pays income to you or your beneficiary based on a percentage (at least 5 percent) of the market value of the trust assets, which are revalued annually. Although the payment percentage is fixed, the distribution from the unitrust varies. The assets most often donated to unitrusts are highly appreciated securities with low yields. By establishing a charitable remainder unitrust, you can reduce or avoid capital gains taxes and receive an immediate charitable income-tax deduction based on the projected value of the "remainder interest" at the time the trust terminates. As the principal of the unitrust grows, the annual distribution also increases. You may add more assets to the unitrust at any time.
• Charitable Remainder Annuity Trust
Unlike the unitrust, the annuity trust maintains a fixed income payout rate (at least 5 percent) for the life of the trust. This is an attractive option for those who prefer the security of fixed income payments instead of variable payments with growth potential. Unlike the charitable remainder unitrust, new assets cannot be added to an existing annuity trust; a new trust must be established for additional assets.
Some assets are not transferred through a will. These include assets in a qualified retirement plan (qualified plans include an IRA, Keogh, 401(K), 403(B), or defined benefit plan) that remain after your lifetime. Often, a retirement plan is a pre-tax asset and, when transferred to a beneficiary, is subject to estate tax as well as income tax. Naming The Parkinson’s Institute as the beneficiary of your qualified retirement plan may be advantageous and financially judicious. Most often, all that is required is to name The Parkinson’s Institute on the beneficiary line when you sign up for your retirement plan, or to modify your current election by notifying your plan administrator.
For more information or to contact The Parkinson’s Institute with your intentions for planned giving please contact Scott Staub, Chief Advancement Officer (408) 542-5603.