Planned Giving and Legacy Gifts

Planned Giving and Legacy Gifts

Gift planning, in its essence, represents a structured agreement that outlines how, when, and under what conditions a donation will transition from the donor to the charity. Whether it takes the form of a gift annuity, a charitable trust, or a more intricate setup, it fundamentally revolves around the donor’s desire to create a lasting legacy and carefully crafting this intention during their lifetime. A planned gift can be as simple as specifying a charitable contribution in one’s will. However, gift planning extends beyond this, encompassing a range of options that offer donors significant advantages during their lifetime.

Creating a Legacy for Your Community Legacy gifts are contributions made to an organization through a will or another prearranged giving method, motivated by various reasons. It may be driven by a desire to ensure one’s memory lives on or to support a cherished charity or cause that holds personal significance and is vital to its continued mission.

It’s essential to dispel the misconception that one needs substantial wealth to make a legacy gift. This is not the case; anyone can set up a charitable bequest from their estate, regardless of its size. Such a gesture holds great significance for the charitable organization and paves the way for the continuity of its mission.

Supporting scholarships and providing resources to meet the needs of a community college and its students through a charitable gift is a step we’re here to assist with, offering information without any commitment. What are the benefits? Tax advantages, the opportunity to express personal values and much more.

Here are various options to consider:

  1. Bequest: A provision in a will or estate plan that designates all or a portion of one’s estate to a specified charity.
  2. Charitable Remainder Trust: An irrevocable trust that distributes a predetermined annual amount to one or more beneficiaries for a fixed period (often the beneficiary’s lifetime). After the trust term, the remaining assets are allocated to the charity. Two types include the charitable remainder annuity trust (provides a fixed payment) and the charitable remainder trust (pays out a fixed percentage of the trust’s value each year).
  3. Charitable Lead Trust: Similar to a charitable remainder trust, but with the principal reverting to either the donor or their designated heirs at the trust’s conclusion. If it reverts to the donor, they receive a charitable income tax deduction; if it reverts to an heir, that individual obtains a charitable gift tax deduction.
  4. Charitable Gift Annuity: An irrevocable transfer of property (e.g., securities) in exchange for an annuity contract that pays the donor a lifetime annuity. As the property’s value exceeds that of the annuity, it constitutes a partial gift to the institution.
  5. Life Insurance: The donor transfers a life insurance policy to the charity. The policy’s cash value is tax-deductible, as are any future premiums the donor may opt to pay.
  6. Life Estate: An arrangement where the donor donates their home to a nonprofit while retaining the right to live there for the remainder of their life. The donor receives an immediate income tax deduction, and upon the donor’s passing, the charity may sell the property.
  7. Pooled Income Fund: Similar to a mutual fund, where the donor contributes to a fund and receives a share of the proceeds based on their contribution’s percentage. Donors are exempt from capital gains tax on the transfer of appreciated property. Upon the donor’s demise, their shares transfer to the charity.
  8. Gifts Through Your Will: Gifts through your will designate a specific dollar amount or percentage of your assets to the college, making a meaningful impact on the lives of our students and ensuring continued support.
  9. Gifts Outside Your Will: Gifts such as Charitable Lead Trusts, Charitable Lead Annuity Trusts, Bargain Sales, and Retained Life Estates bypass probate. Additionally, gifts of assets like appreciated securities, retirement plans, insurance policies, and real estate can name LCCC as a beneficiary.
  10. Gifts That Provide Lifetime Benefits: Gifts like Charitable Remainder Trusts and Charitable Gift Annuities offer fixed payments throughout your lifetime, delivering income and estate tax advantages, along with savings on probate expenses.
  11. Memorial Gifts: Remember loved ones with memorial gifts. These can take various forms and serve as a heartfelt way to honor friends or family members who have passed away.

A gift in your will demonstrates your appreciation for the organization’s mission and contributions. A legacy gift reinforces the organization’s ability to continue its vital educational programs and mentorship for future generations.

Your financial planner, attorney, accountant, or insurance agent can guide you in making a charitable contribution. They can provide insights into the most suitable gift vehicles and the tax benefits associated with legacy gifts.

For additional information, please feel free to contact Silvia Vargas at