"Planned gifts" or "planned giving" refer to several gift techniques that involve either charitable distributions under a will, or gifts where you retain a portion of, or an interest in, the asset you are giving to charity. Planned Gifts can be simple or complex, depending on your unique financial, family or business situation.
Planned gifts can provide many benefits to the donor. These benefits can include an immediate charitable income tax deduction (even though the charity may not receive property until some future date), avoidance or deferral of capital gains taxes on appreciated property used to fund the gift, retained and possibly increased income to you or others you care about, and last but not least, support for charity.
There are a number of different planned gift options, each of which is useful in certain circumstances. The goal is to find the planned gift that is most advantageous to you, to all those who are significant to you, and to the causes you support.
You should always consult with your legal, tax and financial advisors when making a significant gift of any kind – and particularly when you are considering a planned gift. Your advisors can help you find the right gift for you.
Types of Planned Gifts
Charitable Bequest by Will
Bequests are the most common way to make lasting gifts. By including NCCF as a beneficiary of your estate plan, you can continue to provide for your community after your death. Your bequest can be directed to any current fund at NCCF, or to create a separate fund to benefit a particular area of interest or organization important to you. This is a simple option that allows you to enjoy all of your assets while you are alive, yet support your favorite causes at the time of your death. Donors are encouraged to consult with the NCCF staff when preparing their estate plans to insure that the Foundation is able to carry out their wishes.
You may wish to make a charitable gift but also to provide a source of income for you or others. In this situation, one of several retained income gift options may be of interest to you. These options include:
Charitable Gift Annuity
You may establish a charitable gift annuity with the Community Foundation. This is a contract between you and NCCF wherein the Foundation agrees to provide the annuitant (usually you) a determined amount for life, in exchange for your gift. The contract is secured by our assets. It is a unique opportunity to make a tax-deductible gift while receiving a lifetime of annual income from that gift. The remainder of the Charitable Gift Annuity is used to create an endowed fund at the New Canaan Community Foundation or to be added to a current fund at the Community Foundation.
Charitable Remainder Trust
Charitable remainder trusts are established by donors and are separate trusts that benefit only you or your designated beneficiaries and, ultimately, the Community Foundation. Charitable Remainder Trusts allow you to receive income (or provide income for another person) with the knowledge that the funds remaining when the trust terminates will be used to support your charitable interests.
Other planned giving arrangements provide current support for charity with a deferred benefit to you or others, or are deferred gifts that take effect upon your death or the passage of time. Some of these types of gifts include:
Life insurance makes it possible for virtually everyone to make a meaningful gift. Policies that are no longer needed for their original purpose can make excellent gifts when given to the Community Foundation. You can either designate the Community Foundation as the beneficiary, or you can gift the policy during your life and likely receive an immediate income tax deduction.
Like life insurance, retirement assets can be easily gifted to the Community Foundation at death. This can be done by changing the beneficiary designation for the retirement asset. In addition, you can reduce income taxes payable by your family – in addition to saving estate taxes – by giving retirement assets to the Community Foundation.
Charitable Lead Trust
Similar to a Charitable Remainder Trust, a Charitable Lead Trust is established by you. The Community Foundation receives the current distributions from the Charitable Lead Trust, with the remainder returning to you – or more typically being transferred to your family – upon your death. These arrangements can be very useful in reducing the gift and estate tax costs of moving assets to your family and can sometimes be used to generate current income tax deductions.
NCCF acknowledges any donor who chooses to contribute to the Foundation through their estate in our Legacy Society. The Legacy Society is recognized in our Annual Report.
Please call the Community Foundation at (203) 966-0231 to discuss the many opportunities a planned gift can provide you and your family.