Bequests
The official bequest language for Children, Youth & Family Services is:
"I, [name], of [city, state, ZIP], give, devise and bequeath to Children, Youth & Family Services [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."
Remainder Gifts
Many donors choose to leave charitable assets upon their deaths. After assuring that their loved ones have been cared for, donors can use a variety of assets, such as pension plans, life insurance or the proceeds from the sale of a house, for charitable purposes.
Pension plan beneficiaries
A retirement plan is one of the best types of assets to transfer to a charity because it produces taxable income. Most assets an heir inherits are free from income tax. However, an heir will pay income tax on disbursements from a decedent's retirement plan such as a profit sharing plan, Section 401(k) plan or IRA. If you are going to make a charitable bequest, it is usually better to transfer the taxable assets subject to income tax to a tax-exempt charity and to transfer the assets not subject to income tax to heirs.
Life insurance beneficiaries
Perhaps you would like to contribute the proceeds of a life insurance policy to help CYFS, but you are not yet ready to give up ownership of the policy. By naming CYFS only as beneficiary, you retain ownership of the policy and have access to the cash value as well as the right to change the beneficiary.
If you don’t have liquid assets right now but want to support CYFS, a gift of life insurance may be a good option. While you retain ownership of the policy, there is no charitable deduction for the value of the policy when you designate CYFS as the beneficiary or for subsequent insurance premiums. However, proceeds payable to CYFS at your death will not be subject to federal estate taxes.
We encourage you to work with your lawyer or financial advisor as you consider these options. If you have questions about remainder gifts that have not been answered in this section, please contact us for more information.
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Life Income Plans
Charitable remainder trusts
Through our association with the Charlottesville Area Community Foundation, we can administer charitable remainder unitrusts and annuity trusts, both of which pay lifetime income to you or other named beneficiaries.
Establishing a trust is simple. Cash or property is transferred to the trust. The income beneficiaries receive annually an amount equal to a fixed percentage of the trust's fair market value (unitrust) or a fixed dollar amount (annuity trust). Upon termination of the trust, the assets are transferred to your named charitable fund to support your individual or personal charitable giving goals.
Charitable gift annuities
A charitable gift annuity from our community foundation is a way for you to receive a guaranteed income for life and an immediate income tax deduction, while at the same time, leaving a legacy to the charitable cause of your choice.
Through a charitable gift annuity, you receive a fixed stream of income for life. After paying the lifetime annuity to you and your spouse, the remaining principal is transferred to your named charitable fund to accomplish your specific charitable goals. Our payments to you are based on your age; the older you are, the higher the rate. If the annuity is for you and your spouse, the calculation is based on your joint ages. If you need the income now, you can use our deferred plan and receive the income tax deduction now, but begin receiving payments when you reach a specific age. This is an excellent complement to your existing retirement plan.
The tax advantages of both a current and deferred annuity are two-fold. First, you receive an immediate income tax charitable deduction when you create your annuity. This is based on your age and annuity payout rate. Second, a portion of the payments you receive may be treated either as tax-free return of principal or long-term capital gains. These tax advantages increase the net income you receive.
Our colleagues at the Charlottesville Area Community Foundation will be pleased to provide a free, personalized analysis regarding your charitable gift annuity rate and tax deduction information. As these giving vehicles are complex and related to other estate planning, we encourage you to work with your lawyer or financial advisor. If you have questions about life income plans that have not been answered in this section, please contact us for more information.
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The information above is provided with the assistance of the Charlottesville Area Community Foundation
