The 6 Most Popular Planned Gifts: Which one is right for you?
With so many options in planned giving, it can get confusing when trying to decide which is right for you. Let’s take a look at the most common types of planned gifts and together we can explore the options. Planned gifts can be donated to support the general strategic needs of the College or a specific department or program, or create a scholarship. Please contact the CCC Development Foundation to discuss how you can choose any of these options to leave your legacy and support education for students at SUNY CCC.
A deferred gift is a gift that is fulfilled at the passing of the donor. These gifts are popular as a donor can control the asset during their lifetime and make changes at any time. Life income gifts are gifts that pay you back meaning they provide an income tax deduction and an income stream to you or your heirs. These gift types are popular because they help support retirement with an additional revenue stream.
Bequests
A bequest is one of the most common types of planned gifts made through a will or living trust due to its flexibility and ease to update, and costs nothing during the donor’s lifetime. The most common way to leave a bequest is specifying a specific dollar amount or percentage.
Life Insurance
A donor can designate a charity as the beneficiary of the policy and when the time comes the charity receives the proceeds. Most often this allows a donor to leave a larger gift than they would typically be able to during their lifetime. The heirs benefit as well because proceeds given to a nonprofit are exempt from estate tax.
Retirement Plan
Similar to Life Insurance, a nonprofit can be named as the beneficiary to a portion or all of an IRA, 401K, or other retirement plans. When the estate is settled the nonprofit receives the designated amount and the heirs avoid income and estate taxes.
Charitable Gift Annuity (CGA)
A CGA allows the donor to transfer an irrevocable gift to a nonprofit in exchange for a fixed income for life. This plan offers the donor a charitable income tax deduction. At the end of life, the entire remainder is gifted to the nonprofit.
Charitable Remainder Unitrust (CRUT)
A Charitable Remainder Unitrust pays a percentage of the principle to the donor/beneficiary for life, for a term of up to 20 years, or combination of both. The benefit to a CRUT is that it is revalued annually therefore payments may increase over time. The donor receives a charitable income tax reduction for a portion of the value of their assets in the trust. When the CRUT terminates the remainder is gifted to the nonprofit.
Charitable Remainder Annuity Trust (CRAT)
A CRAT pays its donor/beneficiary a fixed amount based on the value of the assets used to establish the trust. Like CRUT, payments can be made for the life of the donor, up to 20 years, or a combination of both. A CRAT takes the appreciated assets used to start the trust and provides a steady revenue stream, defer or eliminate gains, and reduce estate taxes. After the life of the trust, the remainder is gifted to the nonprofit.