Blind Childrens Center
4120 Marathon Street, Los Angeles, California 90029 (323)664-2153
A family-centered agency serving children with visual impairments
Please consider honoring the children by remembering the Blind Childrens Center in your will
As you consider your investments for the future, we hope you will also consider The Blind Childrens Center as an appropriate investment. Not only can we put your gifts to good use, we can also save you tax dollars through the charitable deduction and the avoidance of capital gains. In some cases we can even increase your current income (by reinvesting your assets through a charitable remainder unitrust or annuity trust). Planning for the future can benefit you, your estate, and your favorite charity.
We have included five of the best planned giving opportunities here for you.
If your estate is subject to the federal estate tax, a charitable bequest can save significant tax dollars. A charity can be named as a beneficiary in your will or living trust in a number of ways.
In an OUTRIGHT BEQUEST you can specify an outright gift of cash, securities, real estate or tangible personal property. If you bequeath dollars, you may wish to bequeath a certain percentage of your estate to the charity, rather than a fixed sum; this serves as a hedge against both inflation and unforeseen shrinkage, and assures your heirs of their proportionate share.
A RESIDUAL BEQUEST provides that, after specific bequests are made to named individuals, the charity receives the amount remaining in the estate.
A CONTINGENT BEQUEST means that the charity will receive certain assets only if a named individual does not survive you. For example, you could provide for The Blind Childrens Center to receive a bequest only if your spouse does not survive you. Such a provision recognizes the need to first provide for the security of your family.
GIFTS IN TRUST can provide income for another person or persons for life, with the principal ultimately passing to a charity. In the alternative, you could designate the income to the charity for a certain number of years and the principle ultimately passes to family members or others.
A CODICIL OR TRUST AMENDMENT If you already have a valid, up-to-date will or living trust, you can have your attorney prepare a simple codicil or amendment naming a charity as a beneficiary, without having to rewrite your entire will.
Life insurance provides an excellent means for making a charitable gift. This can be done by either purchasing a new life insurance policy or by contributing a policy which you currently own but no longer need. A charity can be designated as the beneficiary of the policy, while you retain the right to change the beneficiary at a later date, and otherwise retain your ownership of the policy. In this instance, no current federal income tax charitable deduction is available to you since you would be the owner of the policy. However, at the time of your death, your estate would receive a charitable deduction when the proceeds of the policy are paid to the charity.
To receive a current federal income tax charitable deduction, you would need to designate the charity as both the owner and the beneficiary of the life insurance policy. When such a gift is made, the deduction will be approximately equal to the cash value of the policy at the time of the gift. Many donors decide to continue to pay the premiums on the policy after the gift is made, in which case the additional premium payments will be tax-deductible each year.
Example You qualify for new life insurance and purchase a $100,000 policy, naming The Blind Childrens Center as both the owner and the beneficiary. Your premiums on this policy amount to approximately $450 per year. You can deduct these annual premiums on your federal income tax return as a charitable contribution.
The Blind Childrens Center’s Heritage League Gift Annuity allows you to receive a guaranteed income for life, an immediate income tax deduction, and leave an everlasting philanthropic legacy to the Center. When you transfer cash or securities of at least $5,000, you will receive a fixed stream of income for life. After paying this income to you (and your spouse, if you choose), the remaining principal of the annuity becomes a permanent endowment fund. Payments to you are based on your age...the older you are the higher the rate. If you don’t need the income now, you can use the deferred plan; take the income tax deduction now and begin receiving payments when you reach a specific age. The tax advantages of this program are twofold. First, you receive the immediate income tax charitable deduction when you create your annuity. Second, the payments you receive may be partly an income tax-free return of principal or may be taxed at the lower capital gains rates. As you can see, these advantages increase the impact of the income you receive.
Example You establish an annuity trust with $100,000. You specify that you will receive an annual income of $6,000 from the trust, with the payments to be made quarterly. No matter how well or how poorly the trust’s investments perform, you will receive that fixed $6,000 each year (except in the highly unlikely event that the trust "goes broke").
A charitable remainder unitrust allows you to make a substantial gift to The Blind Childrens Center and yet continue to receive income from the assets contributed. Your gift is administered separately as a trust. At the time the trust is created, you specify instructions to the trustee to pay you, or other designated beneficiary(ies), an annual percentage or a fixed amount. Depending upon the type of trust, you may either receive a fixed dollar amount each year (an annuity trust), or a fixed percentage of the fair market value of the trust’s assets, as those assets are revalued annually (a unitrust).
Example You create a unitrust to pay you 6% each year and initially contribute $100,000 to the trust. During the first year, you will receive $6,000 from the trust. If the trust’s assets are valued at $110,000 at the beginning of the second year, you will receive $6,600 ($110,000 x 6%) for the second year. This same calculation will be made each subsequent year. In addition to this income, you will receive a substantial charitable deduction in the year you create the trust. Thus, your effective yield on the trust will be much higher than the actual 6% payout specified, because of the tax advantages.
The creation of a charitable lead trust allows you to pass significant assets on to your younger family members with little or no gift or estate tax payable to the government. Under this arrangement you transfer assets to a trustee who would then make annual payments to the charity for a specified number of years, after which time the assets remaining in the trust would go to your children, grandchildren, and others. For individuals in high estate and gift tax brackets, this trust means the opportunity to transfer substantial assets to younger generations completely or significantly free of transfer taxes, while benefiting the Center at the same time.
Example With $1,000,000 in assets, you could create a charitable lead trust which would pay The Blind Childrens Center 6% of the fair market value of the trust each year for 20 years. At the end of the 20-year period, the trust would terminate and the trust principal remaining (including any asset appreciation) could be distributed to your children and grandchildren. Under present IRS tables, there will be no transfer tax payable, assuming you have not used any of your unified credit.
Blind
Childrens Center
4120 Marathon Street
Los Angeles, California 90029-3584
(323) 664-2153
Tax ID: 95-1656369
For more information about including the Center in your will or estate plan, contact Muriel Scharf, Director of Development, 4120 Marathon Street, Los Angeles, CA 90029 (323) 664-2153 EXT. 330.
Blind Childrens Center
4120 Marathon Street
Los Angeles, California 90029-3584
(323) 664-2153 • Fax (323) 665-3828
©2008 Blind Childrens Center
All rights reserved.
