types of Legacy Funds
Many people are just now reaching the age where they can tap into Individual Retirement Accounts and other retirement funds. Often a portion of these assets will remain after their lifetimes. If you plan to pass these retirement assets on to anyone but your spouse, they could be subject to significant taxation, as much as 80 cents or more on the dollar. Making the Peninsula Community Foundation of Virginia the successor beneficiary to a spouse for those remaining assets gives the full dollar value to support your charitable goals while removing the assets from your estate for tax purposes.
Whether you decide to support specific nonprofit organizations or to create a scholarship fund to help students, the Foundation will provide ongoing stewardship to ensure your wishes are fulfilled.
Charitable Gift Annuity
A Peninsula Community Foundation of Virginia Charitable Gift Annuity (CGA) can generate immediate or deferred income for the life of one or two designated individuals. It can provide a partially tax-free income and an income tax deduction for you and allow remaining assets to be used to support your favorite charities and charitable causes.
The Peninsula Community Foundation offers CGA's to donors who are at least 60 years old. The minimum contribution is $50,000. Payments are based on your current age; rates are established by the American Council on Gift Annuities.
Charitable Lead Trust (CLT)
Often described as the reverse of a CRT, a CLT distributes income to your charitable fund for a period of years or throughout your lifetime. Then the assets return to you or, more typically, to surviving family members. The result is gift and estate tax savings. If planned correctly, a CLT will allow you to make a significant gift to charity and transfer assets to family members with reduced or no gift and estate taxes.
Charitable Remainder Trust (CRT)
A CRT permits you to make an irrevocable gift and receive an income in return. Moreover, if appreciated assets are used to fund your trust, you will not be subject to capital gains taxes. You will also be entitled to an income tax charitable deduction.
There are two types of CRT's: Unitrusts and Annuity Trusts. In both cases, the term may be for life or a period of years up to a maximum of 20 years. The minimum annual percentage payout is 5%.
The Peninsula Community Foundation of Virginia offers a great deal of flexibility as the manager of a CRT. The Foundation can provide a list of financial organizations that can serve as trustee. By using the Foundation, you can use trust assets to establish a fund that will support specific organizations, general charitable causes or create scholarship programs. As the recipient of the remainder trust, the Foundation will receive the assets at the end of the trust term and provide ongoing stewardship of your charitable wishes.
Individual Retirement Accounts (IRAs) or other qualified retirement plans are often one of the best types of assets to leave to charity because they are taxed so heavily when left to heirs. When you leave your retirement plan assets to our community foundation, 100 percent of the gift will be available to support your charitable interests.
For more information about establishing a fund, please contact Michael Monteith, Email/757.327.0862