The culmination of a life well-lived
Where would our kids go without our parks, our sports programs, and our community centers? And where will they go tomorrow because of them?
Planned giving enables individuals to truly make a difference for the youth of our community. Through a planned gift you can achieve your philanthropic desires, without negatively impacting everyday financial commitments of your personal well-being, or that of your family. Planned gifts can take many forms, some of which have estate and inheritance, income tax and capital gain tax advantages. All of these planned giving options should be discussed with a professional financial advisor or planner of your choosing to select the appropriate planned gift to fit your needs.
A Bequest By Will
A bequest by will can take one of three forms: A specific bequest may designate that a specified amount, a percentage of your estate, a specific asset, or a collection of assets be transferred to Rockford Park District Foundation.
A residuary bequest may specify that all or a portion of your estate be left to the Rockford Park District Foundation after you have provided for other beneficiaries. A contingent bequest may specify that the Rockford Park District Foundation receive a portion of your estate only if there are no surviving close family members.
A bequest may have either a restricted or unrestricted purpose.
An unrestricted bequest has the greatest flexibility because the gift can be directed by the Rockford Park District Foundation for the District's highest priorities at the time it becomes available. A restricted bequest may be restricted to a specific purpose or area. Because the money from a bequest generally does not reach the institution for many years, it is advisable to minimize the limitations or restrictions as much as possible.
A memorial bequest, either restricted or unrestricted, can be established as a memorial endowment that will give lasting tribute to a special family member or respected friend, teacher, or mentor. The endowment fund principal will be preserved, and only the income is used for program support, such as the Rockford Park District playground programs, youth sports, etc.
A Life Income Plan
Such a plan allows you to make a significant gift to the Rockford Park District Foundation and at the same time retain or increase your income. Your estate planning professional or tax advisor will explain how current tax laws may enable you to:
- reduce income tax with a charitable tax deduction
- reduce or avoid capital gains tax
- lower taxes on your estate
Life income plans take various forms, including charitable remainder trusts and charitable lead trusts.
A Charitable Remainder Trust
A charitable remainder trust is designed to pay annual income to the donor or the donor's designee. In this case, the trust document provides that income earned by the trust goes to the donor and/or beneficiaries while the donor is alive, with the remainder going to the Rockford Park District Foundation upon the donor's death. Though cash or other property can be used to set up the arrangement, securities generally are the most common means of funding a charitable remainder trust. Once established, the trust cannot be amended or revoked.
Ultimately, at the time of the donor's death, the Rockford Park District Foundation receives full ownership of the trust assets. In effect, you make a gift of these assets to the institution, but retain the benefit of the income they earn during your lifetime (it is possible, however, to continue payments after your death to another beneficiary you specify).
A Charitable Lead Trust
Unlike a charitable remainder trust, which is funded with an initial donation that pays income over time to the donor, the terms of the charitable lead trust provide for income to be paid to the Rockford Park District Foundation, with the remainder ultimately passing to the donor's beneficiaries. Thus, this type of arrangement is suitable for you if you want to benefit the Foundation with income derived from your assets currently not needed — but wish your family members or heirs to own these assets eventually.
A charitable lead trust remains in place for a specified number of years, during which time the Foundation annually receives a certain percentage of the overall value of the trust.
Life insurance can be a desirable way to benefit the Rockford Park District, for it can be used to fund a substantial gift for a relatively small cash outlay on the donor's part. In addition, life insurance policies can be used as charitable gifts, regardless of whether all the premiums have been paid.
You should consult your tax advisor to determine the tax advantage to either naming the Rockford Park District Foundation as the primary beneficiary of a life insurance policy or irrevocably assigning ownership of a whole ordinary life policy to the Foundation.
A Charitable Gift Annuity
A gift annuity is a contract between the company that issues the annuity and the donor. In return for a donation of cash or other assets, the donor can designate the Rockford Park District Foundation to receive the income in a fixed or variable payment for life. The donor can also claim a charitable tax deduction. Income from a gift annuity may be deferred for several years, which can benefit younger donors and their beneficiaries in planning supplementary retirement income.
Other Planned Gifts
Retained Life Estate
A donor may make a gift of a farm or residence to the Rockford Park District Foundation within its municipal boundary and retain the right to live in the house for the remainder of the donor's life. The donor receives an immediate income tax deduction for the gift. At the donor's death, the property goes to charity.
Other Gifts of Land
The Rockford Park District Foundation will gratefully consider receiving other parcels of land. Prospective donors should contact the Foundation to discuss gifts of land prior to making them part of a planned gift.
In addition, the Rockford Park District Foundation may be the named beneficiary of a retirement plan such as an IRA, 401K, or a profit sharing plan. This kind of gift usually allows the Foundation to acquire the gift without income tax liability. This enables surviving family members to receive other assets of increased value while the Foundation receives assets that would otherwise be taxed to the estate of the decedent.
To make a planned gift, call 815.987.1675
Those making a planned gift commitment are invited to become members of the Rockford Park District "Parks for Life".