CREATE A LEGACY WITH PLANNED GIVING
“Planned giving” integrates your generosity with your overall financial, tax, and estate planning goals to maximize benefits to both you and Hadassah. You can perpetuate Hadassah’s life-saving work now and for years to come, and find a strategy to help meet your financial goals. Planned gifts include Gift Annuities and Charitable Remainder Trusts.
Hadassah considers each donor as both special and important, with unique concerns and goals. Life Income Plans are designed to fit your individual needs. Through our personalized attention we are able to customize a plan that brings you financial security and peace of mind for the future. Call National Hadassah for a personal consultation at 1-800-428-8884 or email: firstname.lastname@example.org
We also highly recommend that you consult with your own tax or legal advisor prior to making a planned gift.
If you want to combine a gift to Hadassah with a secure lifetime income, plus receive a significant tax advantage, a gift annuity (standard, deferred, or flexible) may be right for you.
A gift annuity is a planned giving method in which you receive guaranteed income for life.
Standard Gift Annuity
A standard gift annuity works in three easy steps:
1. You make a charitable gift to Hadassah;
2. Hadassah holds the money in a specific fund and pays you an income for life;
3. At your death, whatever is left in the fund from your gift is transferred to Hadassah.
The minimum amount required to set up a gift annuity is $5,000. The minimum age for the gift annuity is 60 years. You may set up a gift annuity to benefit another person who is at least 60 years old. A gift annuity may also be written for two lives so that two people share in the annuity payment. This means that a husband and wife can ensure that the surviving spouse receives the same amount of income after the first spouse’s death as the two received before that death.
Once made, the gift is irrevocable, meaning that your principal is nonrefundable. The amount of the annual annuity payment to you is based on the annuity rate. The annuity rate is based on the recipient's age at the time the gift is made. (The older the recipient, the higher the annuity rate.) If you itemize deductions on your tax return, you will be able to claim a charitable deduction for a portion of the gift to Hadassah. A portion of each annual annuity payment is tax-free. The rest is taxable as ordinary income. If you contribute appreciated stock or another appreciated capital asset instead of cash, a portion of each annual annuity payment will be taxed at your capital gain tax rate.
Deferred Gift Annuity
A deferred gift annuity is simply what it sounds like: a gift annuity that one can establish now but start receiving the annuity payment at a later date. Recommended for younger donors to build retirement earnings for the future, a deferred gift annuity is established while a donor is not yet 60 years old and go into effect when the donor reaches 60 (or beyond).
Everything works the same as a gift annuity except that you make the gift to Hadassah before you reach 60 and begin to receive the annual annuity payments at a specified age after age 60.
Flexible Deferred Gift Annuity
A flexible deferred gift annuity is a deferred gift annuity in which you specify a range of dates during which you will start to receive your annual annuity payment.
Everything works the same as a deferred gift annuity except that you specify a range of 8 years during which you will begin to receive the annual annuity payment. To start the payments, simply give Hadassah three months notice.
CHARITABLE REMAINDER TRUSTS
A charitable remainder trust is a trust that provides a benefit to the donor who establishes the trust (or someone chosen by her) and also benefits Hadassah. There are five types of charitable remainder trusts: annuity trusts, annuity trusts plus, unitrusts, flip unitrusts, and lead trusts.
All of the trusts work in basically the same way:
Establish the trust, normally with Hadassah as trustee, and fund the trust with cash or property. Each year the trust pays you an annual annuity payment for either a set number of years or for the rest of your life.
A charitable remainder annuity trust is a trust that pays a fixed dollar amount annually for life.
The minimum amount to establish a charitable remainder annuity trust is $25,000. The minimum age to establish a charitable remainder annuity trust is 60. Once made, the gift is irrevocable, meaning that your principal is nonrefundable. The trust can be established for a set term of years or for the rest of your life, or lives if you and your spouse (or other persons) are both beneficiaries. You will receive a substantial income tax deduction in the year you create your annuity trust. If the gift is made with securities or real estate, you avoid all capital gains tax on the appreciated value. At the end of the trust, Hadassah will use the amount remaining for its important work.
Annuity Trust Plus
The annuity trust plus is the same thing as a charitable remainder annuity trust, but it has one important addition. You will receive a guaranteed income for your life (or lives), and then your children or grandchildren will receive the same amount each year for an agreed upon number of years. If you have children or grandchildren, then the annuity trust plus might be right for you.
The details are the same as for the annuity trust, plus the limit to the “plus” portion of the trust is 20 years.
A unitrust is a variation of the annuity trust. It differs from an annuity trust in that, instead of paying you a fixed dollar amount each year, it pays you a fixed percentage of the value of the trust assets each year. The minimum amount for a unitrust is $100,000. The minimum age is 60.
The unitrust was created for unique financial situations. It lets you participate in the trust’s financial performance. Each year the value of the trust is recalculated to take into account growth of the principal. You will share in that growth by receiving a fixed percentage of the principal plus interest. If there are losses in any year, the amount received will decrease for that year. Over the duration of the trust however, the variable unitrust will probably out-perform the fixed return annuity trust.
The unitrust is particularly good for those of you who wish to participate in the growth of your trust fund, and feel strongly about the potential long-term grown of the stock market. It is also an ideal way to handle assets that have an uncertain current value but are expected to appreciate in the future, perhaps real estate which produces no income now but has the potential to become valuable, or those tech stocks that you still believe will rise again.
Unitrusts are also of special value to those who are anticipating a major change in your financial status, perhaps an upcoming retirement. Unitrusts are endlessly flexible, and might be the perfect vehicle for your unique investment needs.
The flip unitrust is a variation of the unitrust. The difference is that, at first, you receive only a very small variable return, usually 1 or 2 %, until a specified date. You choose the date – say your 75th birthday. At that time, the unitrust “flips” to a higher yearly percentage, established in the original agreement. During the years before your birthday, the principal is invested, with maximum growth as the goal. When you turn the age previously designated, the principal will have grown substantially because of this investment strategy.
The flip trust is good for those who don’t currently need extra income, but will want a comfortable lifetime income after a specific date or event; you retirement, or a special birthday. Another use is to accumulate income for a second beneficiary like a child or grandchild. Flip trusts are particular useful for those who foresee a major change in their financial status down the road and want to prepare for it.
A charitable lead trust is a trust created for a set number of years. The difference from other charitable trusts is that Hadassah receives the annual income for the length of the trust. At the end of that trust period, the invested principal, including all growth, goes to whomever you specified in the trust.
The minimum investment is $50,000. The minimum term of the trust is 10 years.
This is an excellent way to provide for your grandchildren’s education and in fact this is often called a Grandparents Trust. If your heirs can wait at least 10 years for their inheritance, then a lead trust with Hadassah is exactly what you need. As their inheritance will be in a safe Hadassah lead trust, they are guaranteed their money will be there for them, tax-free, when they need it. If you are subject to the federal gift or estate tax, there will be a substantial gift tax deduction.
HOW TO MAKE A PLANNED GIFT
A trusted legal or financial advisor can help you develop a plan for making charitable gifts that
complement your current investment and estate plans. He or she can help you determine:
- The appropriate gift level based on your circumstances
- The type of gift
- The tax implications of your gift
- How to best structure the gift to benefit both you and Hadassah
Your professional advisor can put together all of the necessary financial and tax-related paperwork to set up your planned gift.
Questions? Call National Hadassah for a personal consultation at 1-800-428-8884 or email: email@example.com.