February 4, 2009

The time for giving is now

Special to Denver Catholic Register

If there were ever a time to be inspired to take charitable action, now is that time. The needs in our community are urgent and a quick response will help worthy charities and organizations meet them.

Henry Ford once mused that most people spend more time and energy going around problems than in trying to solve them—or just doing what needs to be done. It doesn’t take much—in fact, it just takes a little—to help a lot. Moreover, that is what a charitable donation will do now.

Top 5 recession-proof giving ideas

Here are five savvy charitable gifts that can support the mission of organizations such as Catholic Charities today or tomorrow. Depending on which gift you decide to make, you can minimize your taxes, reduce the tax burden for your heirs, earn lifetime income and fund important programs that further the charitable organization’s mission.

1. Bequest – If you plan to make a charitable gift by will, think it through carefully. Then, meet with your attorney to discuss and update your will. Tell him or her exactly what you want to do. Be as clear as possible in describing what you want given to whom. If you name an organization such as Catholic Charities in your will, tell them.

2. Charitable gift annuity – This is a simple contract between you and the charity that pays you a fixed dollar amount for your lifetime. The older you are, the higher your annuity rate. If you use appreciated property to fund the gift annuity, you will escape the capital gains tax on the gift portion of the transaction. Moreover, you are able to spread the remaining capital gains tax over your lifetime. You also receive a partial income tax deduction.

3. Charitable remainder annuity trust – The charitable remainder annuity trust is a deferred gift that lets you commit a substantial amount to support the mission of your choice later while securing income now. You donate assets to this trust and receive a fixed dollar amount each year for the rest of your life. You decide at the outset the amount you wish to receive from your contribution, perhaps far more than the yield from your current investments. In addition, if you wish, your spouse or other individuals can receive the same income after your lifetime. Ultimately, the remaining balance in the trust (the “charitable remainder”), after the lifetimes of those you choose, will be distributed to your designated charity.

4. Future gift of a life insurance policy – Rather than cancel policies you no longer need, you can name a particular charity as the beneficiary, or simply donate the policies outright.

5. Future gift of retirement plan assets – Your most efficient estate planning option may be leaving all or a portion of your retirement plan to a charitable organization, because tax laws often subject these assets to the highest combined income and estate taxes upon death. Many techniques can be used to avoid combined tax rates of nearly 65 percent. At the same time, you can pass more tax-favored assets to your family.

Article provided by The Stelter Company and reprinted with permission.  For more information on planned giving, contact Kurt at 720-377-1371, or kbartley@ccdenver.org. The information in this article is not intended as legal advice. For legal advice, please consult an attorney.