Holy Trinity Legacy Society

Including a charitable bequest as a part of your will is a great way for you to provide long-term support for Holy Trinity while also effectively managing your estate. Making a charitable bequest is easy. If you want to leave a bequest to Holy Trinity, you must specifically do so in a will or trust. Your will or personal trusts are legal records of your wishes regarding how your assets should be handled at your death. Instructions regarding the dispensation of your assets are called bequests.

Charitable Bequests are not subject to estate or inheritance taxes, therefore reducing the tax burden of an estate. Charitable bequests also provide flexibility because they may be changed at any time. Your estate will be entitled to a charitable deduction for the full, fair market value of your gift. Holy Trinity can assist you and your attorney with standard legal language necessary to establish your charitable bequest.

• General Bequest: With this type of bequest, you simply leave a specified dollar amount (e.g., $25,000) to Holy Trinity.
• Specific Bequest: A bequest of this type involves the designation of specific property (e.g., a home, a farm, or shares of stock) that you want Holy Trinity to receive.
• Residuary Bequest: Through a residuary bequest, Holy Trinity will receive the remainder of your estate after all liabilities and other bequests have been paid. It may augment a general or specific bequest to Holy Trinity if the size of the estate allows, or may ensure that other beneficiaries receive their bequests prior to distribution to Holy Trinity.
• Percentage Bequest: You may direct that Holy Trinity receive a percentage of your estate or residuary estate. In this case, if the size of your estate changes, the bequest will change proportionately.
• Contingent Bequest: It is important to anticipate a situation in which a beneficiary might die before you or choose to disclaim the property. To prepare for such an occurrence, consider naming Holy Trinity as the contingent beneficiary.

Perhaps a charitable gift sounds attractive but you are not ready to give up ownership of your life insurance. By naming Holy Trinity as beneficiary only, you retain ownership of the policy; have access to the cash value and the right to change the beneficiary. If you would prefer that a member of your family remain the primary beneficiary, you can make Holy Trinity the contingent or successor beneficiary to receive the proceeds if your primary beneficiary dies before you.

A retirement plan is one of the best types of assets to transfer to Holy Trinity following death because of the income tax consequence. Most inherited assets are free from income tax. However, an heir will pay income tax on disbursements from a decedent’s retirement plan such as a profit sharing plan, Section 401(k) plan or IRA. If you are going to make a charitable bequest, it is usually better to transfer assets subject to income tax to a tax-exempt charity – such as Holy Trinity – and to transfer assets not subject to income tax to heirs.

For a taxable estate, the combination of estate and income taxes will frequently exceed 75 percent of the total amount – even more if the generation skipping transfer taxes are triggered. At a cost to your heirs of only 25 percent of the fair market value of these types of assets, you could apply 100 percent of the assets to Holy Trinity to accomplish your specific charitable objectives. Estate taxes change, so be sure to consult an accountant.

Of course, married couples can postpone the decision by transferring the assets to the surviving spouse and claiming the marital estate tax deduction. However, since that deduction is not available to unmarried individuals and the second-to-die of married couples, a charitable bequest of pension plan assets might be the best option.

You may have purchased life insurance when you needed protection for your family, business or estate. In later years, you have found you no longer need that insurance. If you want to achieve immediate tax benefits, you should consider irrevocably assigning an insurance policy to Holy Trinity.

Giving life insurance as a gift to charity allows even those with modest means to leave a substantial contribution to the cause most meaningful to them. A gift of life insurance is a deferred gift, which means the proceeds from a commitment made now will be realized in the future. Donors often struggle between their desires to achieve philanthropic goals and their need to preserve their estates for their families. A gift of life insurance can eliminate this conflict.

In addition to gifting an existing life insurance policy, a new life insurance policy can be purchased from your life insurance professional naming Holy Trinity as owner and beneficiary. The initial premium payment plus subsequent insurance premium payments made by the donors are deductible as charitable contributions. A gift of insurance will not reduce your current stream of income.

A Donor Advised Fund allows you to make a charitable gift and receive a current year tax deduction while giving you the flexibility to have those funds distributed to multiple charities over time. You may benefit from a strategy of "clumping" the gifts you plan to make over the next few years if your annual gifts don't exceed the increased standard deduction this year. You then act as the advisor on your fund to suggest distributions to the charities you support.

Appreciated stock, business interest, and real estate are popular gifts to a DAF. The minimum to start a DAF with the Catholic Foundation of NE Kansas is low at $5,000. Your DAF can simplify your giving with easy online access to your fund while the Foundation handles the accounting, fund management and administration of your fund.