The Colorado Women’s Education Foundation’s (CWEF) Planned Giving Program was established to assist those who want to make a gift to the Foundation through estate planning.
Planned Giving is a powerful philanthropic tool that can help maximize the personal benefits of charitable giving. Whether through lifetime gifting or end-of-life bequests, initiating Planned Giving as part of your estate plan helps ensure that designated assets are distributed in ways that are meaningful to you. With so many ways to give, consider your personal circumstances and the needs of your heirs, as well as these planned giving strategies. If you have a taxable estate, charity is a wonderful way to help you, your heirs, and CWEF.
By donating assets and funds to CWEF during your lifetime, it is personally satisfying and you are rewarded for your generosity with a tax deduction now.
Lifetime gifts are fulfilling and the best lifetime gifts may be direct donations of highly appreciated assets, such as stock, real estate, jewelry, and collectibles. When sold normally these appreciated assets can result in a significant tax burden for you. Instead if you donate the asset to CWEF directly, CWEF benefits by selling the asset and receiving the full proceeds of the sale without tax. You benefit by eliminating substantial taxes on the gain while obtaining a charitable tax deduction for the fair market value of the asset. In addition, you will successfully remove any future appreciation from your taxable estate without transfer costs.
One of the rewarding ways to continue your lifetime generosity is by making a charitable bequest in your will. A bequest is one of the easiest and most direct ways to make a charitable donation as it only requires a statement of an outright gift in your will. Your donation will reduce the value of your estate and corresponding estate taxes.
Making an outright gift only requires a short paragraph in your will that names CWEF as the charitable beneficiary and states the amount of your gift at the time of death. This option is especially appropriate when your gift is cash or when the amount of your gift is relatively small. A bequest will provide support for CWEF’s mission while also providing a tax deduction for your estate. If your heirs are not yet self-sufficient or are dependent on their inheritance, then consider naming CWEF in your contingent disposition section of your will or as a contingent beneficiary (see Beneficiary section). If your intended gift is large, consider one of our lifetime gift strategies.
Demonstrate your support of CWEF’s mission beyond your lifetime by naming it as a beneficiary of your life insurance, annuity, brokerage account, or your retirement plan.
Due to potential double tax savings, making CWEF the beneficiary of your retirement account may be more beneficial than any other account designation. First, the charitable gift will be deductible for estate tax purposes, which may make more assets available for your non-charitable beneficiaries and heirs. Second, as a charity CWEF does not have to pay any income tax on the funds it receives whereas your heirs will have to pay taxes on their personal returns. This double tax benefit can save taxes that may otherwise eat up a substantial portion of your retirement account. You may replace the “lost inheritance” by utilizing effective wealth replacement strategies. Consider a purchase of life insurance to replace the benefit to your heirs’ income tax free. Further, if you place the new insurance in an Irrevocable Life Insurance Trust (ILIT), you may also be able to eliminate estate taxes on the insurance proceeds.
Establishing a form of charitable trust is a means of providing CWEF with much needed support. It may also help to increase your income, unlock the potential of illiquid or appreciated assets, reduce taxes (income, gift, and estate), reduce or eliminate investment concerns, and still provide for yourself and/or your heirs.
There are many types of charitable trusts, the most common of which include the charitable lead trust and the charitable remainder trust. These trusts may be established during your lifetime or as part of your will or trust. As your selected charitable beneficiary, a charitable lead trust would provide CWEF with a stream of income for a designated number of years. Once the income period has ended, the trust principal passes to your designated non-charitable beneficiaries and heirs. A charitable remainder trust is the mirror image of the charitable lead trust. Trust income is payable to you or designated beneficiaries, and CWEF receives the trust principal at the end of the term.
Memorials and Endowments
Discover a powerful way to make a gift to CWEF in your name or in the name of a loved one while realizing tax benefits for your kindness and provide a legacy for many generations to come. Designate your personal wishes in your will to be fulfilled at your passing. When a loved one passes, request donations to CWEF in lieu of flowers or gifts. Honor his/her memory by raising a memorial fund in his/her honor. Further expand your contribution by encouraging friends, family, and coworkers to make a gift in your honor or a loved one’s honor. Remainder Interests–Donate Your Home: Make a gift of a remainder interest in your home or property, receive sizable tax benefits now, and still continue living in your home for the rest of your life.
If you have a primary or secondary home, consider establishing a Qualified Personal Residence Trust (QPRT) with CWEF as the remainder beneficiary. This may remove a highly appreciated residence from your estate while still allowing you to continue enjoying its use for a period of time that you designate.
Contact CWEF for more information about Planned Giving & Bequests: firstname.lastname@example.org
These are just a few charitable strategies to consider, and there may be different levels of benefits to each of these planned giving strategies. Consult your financial planner, estate-planning attorney, and/or tax advisor for assistance in determining the best strategy for your family.