-How a Bequest Works
-The Benefits of a Bequest
Last Will and Testament
Legacies and bequests are basic methods through which a donor designates gifts in their will. The residue of a decedent’s estate, specific dollar amounts, a percentage of the estate, gifts of securities, real property, and business interests may be made as bequests. A testamentary trust may also be set up with income beneficiaries receiving benefits for a fixed term of years or for life, and with the Foundation receiving all or a portion of the residual principal. Read more...
Charitable Gift Annuity
A Charitable Gift Annuity is a contractual arrangement between a donor and a charitable institution whereby the donor makes a gift to the charity and the charity agrees to pay a specified income to the donor for life. It is legally binding and is payable from the general assets of the Foundation. The payout rates for a “Single Life Annuity” or “Two Life Annuity” agreement do not exceed those suggested by the American Council on Gift Annuities as updated on their website, www.acga-web.org.
The Catholic Education Foundation is a member of the American Council on Gift Annuities, a national organization that was established in 1927 to study and recommend the range of rates that would provide benefit to both the charity and donor, thus motivating donors to give based on the cause of the charity rather than competitive payout rates. The standard rates suggested by the ACGA that have been adopted by charities throughout the country help prevent competition among charitable organizations in establishing pay out rates to donors.
Charitable Remainder Unitrust
A Charitable Remainder Unitrust is designed to pay an annual income to one or more non-charitable beneficiaries for a term of years or for the lives of those individuals in an amount equal to a fixed percentage of the value of trust assets. The amount of each payment to the beneficiaries will vary based on fluctuations in the value of the trust as determined on an annual basis. Upon the death of the beneficiaries, the assets of the trust are transferred to the charitable organization in the name of the trust. The maximum payout rate will be determined by the Foundation using the guidelines suggested the American Council of Gift Annuities.
Charitable Remainder Annuity Trust
Similar to above Unitrust, the Charitable Remainder Annuity Trust pays an annual income to beneficiaries with a fixed dollar amount, not less than five per cent of the initial fair market value of the property placed in trust, which will not fluctuate with the value of the trust. The payout is determined at the creation of the trust and cannot be changed. The maximum payout rate will be determined by the Foundation using the guidelines suggested the American Council of Gift Annuities.
Charitable Lead Trust
A Charitable Lead Trust is designed to provide income to a charity for a specified number of years as determined at the creation of the trust. Once the term of the trust expires the assets of the trust are returned to the donor or some other designated individual. The income to the Foundation can be in the form of either an annuity interest (fixed income) or unitrust income (varies with the value of the trust).
Life Estate Agreement
A donor may contribute their personal residence, vacation home, farm, vacant land, or other real estate to the Foundation and maintain their right to live on the property until their death.
The donor reserves the right to maintain residence on the property and is entitled to keep all income produced by the property. The donor agrees to pay all expenses of upkeep including property taxes. The property is passed on to the Foundation at the death of the last surviving beneficiary.
Donor Advised Fund
The Donor Advised Fund enables the donor to establish a fund that will provide for one or more of his or her favorite educational programs. The donor advises the Foundation when they wish to make a gift to the charity of their choice, using the interest of the fund or the corpus. In addition, the donor receives a tax deduction each time they deposit into their fund and the charitable dollars appreciate through the interest that the fund earns.
The Supporting Organization, also known as a Supporting Foundation, provides an alternative to donors who have created or are considering the creation of a separately-incorporated Family Foundation. This vehicle enables the donor to enjoy more tax advantages and the elimination of arduous tax reporting because it is classified as a public foundation under the Catholic Education Foundation. Creators of Supporting Foundations experience the benefits of distributing grants to a virtually unlimited choice of donor-favored Catholic charitable causes. Family members belong to a board of directors who are able to help decided upon specific grant recipients.
Charitable Life Insurance Policy
The Foundation may be the primary, secondary, or residual beneficiary of life insurance. If ownership of the policy is given to the Foundation, the gift becomes irrevocable and thus may be treated as a charitable contribution with a value at the time of donation determined by the Internal Revenue Service regulations.
The Diocese will consider gifts of real property that are proposed for donation. All property accepted will be immediately listed for sale unless acquired to meet operational needs or the needs of the Diocese as stipulated by the Chairman of the Board. Otherwise, in no case will a waiting period be observed.
Last Will and Testament additional information
How a Bequest Works
You can provide now for a future gift to the Diocese (or parish) by including a bequest provision in your will or revocable trust. Your will or trust directs a bequest for the purpose(s) you specify.
The Benefits of a Bequest
• Your assets remain in your control during your lifetime.
• You can modify your bequest if your circumstances change. You can decide whether we will benefit outright through your will or only after other conditions are met, such as the distribution of bequests to heirs and other loved ones.
• You can direct your bequest to a particular purpose; be sure to check with the Diocese or Parish to make sure your gift can be used as intended. (By leaving your gift unrestricted, you leave Your assets remain in your control during your lifetime.
• There is no upper limit on the estate tax deductions that can be taken for charitable bequests.
• What form should your gift take: You may choose to designate that we receive a specific sum from your estate (for example $5,000), or you may choose to leave a percentage of your estate (for example 5%).
• You can give almost any kind of asset through a bequest, including cash, securities an interest in real estate (such as a residence) tangible personal property (such as works of art or antiques), the remainder of your IRA, Keogh, tax-sheltered annuity, qualified pension or profit-sharing plan.
• You even have the option of “endowing” your gift to provide a lasting financial resource. Because we never spend the principal of an endowed gift, there is always income to support our programs and projects.
• You can have the satisfaction now of knowing that when you are gone your memory will live on through your bequest in the way you intended.
When including a provision for us in your will, you will want to make sure that your intention is stated clearly and that you have our correct name and address. It would be prudent if you or your adviser calls us before drafting the document to ensure that the information you are including is accurate. Contact Joe Langenderfer, (815) 221-6127 for further information.