Planned Giving Q&A
Your gift to Naperville Area Humane Society (NAHS), whether through structured lifetime gifts or gifts that occur upon your death, can be your legacy to the long-term survival of NAHS, which will then be around long after your death to assist in the care and protection of the animals that bring such joy to our lives. As a friend of NAHS, you know the joy that comes from knowing that your support of our organization supports animal welfare and positively impacts the people that we serve. To continue our work, we need your assistance in making those gifts that will ensure the long-term survival of the organization so that we can continue to give the same fine care to animals in the future. If you give, you will not only have the joy of knowing that NAHS will continue its fine work, but you may also qualify for a charitable tax deduction as NAHS is a Section 501(c)(3) organization under the Internal Revenue Code. The NAHS federal tax ID number is 363040480. Please check with your tax advisor to determine how your gift may qualify for such benefits.
The easiest way to make a gift at your death is in your Will or Living Trust. You can include a specific gift to NAHS in your Will (or a codicil to your Will) or your Living Trust (or an amendment thereto) by adding the following simple language:
“I give and bequeath to Naperville Area Humane Society, a not-for-profit organization, all the rest and residue of my estate.”
You may also give a percentage of your estate, a specific dollar amount or certain assets or property. The current estate tax law gives you an unlimited estate tax deduction for gifts of cash or other property that you may give to a Section 501(c)(3) charity such as NAHS.
You can name NAHS as the owner and the beneficiary of a new or existing policy and even work with NAHS to set up a specific program, service or project that you would like to benefit. Using life insurance allows you to make a substantial gift to NAHS with a relatively small investment for the annual premiums, especially if you are a younger person. If you make NAHS the owner of the policy and pay the annual premiums, your payments may be tax deductible. Most any type of life insurance coverage – term, universal or whole life policies – may be used for this purpose.
If you are an investor, you know what a wild ride the stock market can be. Rather than sell stock, pay the capital gains tax and give the net proceeds to NAHS, why not consider making a gift of the stock directly to NAHS and avoid payment of capital gains taxes? Even if you would pay 15% federal capital gains rate on the long-term capital gain from the sale of your appreciated stock, not having to pay that tax would allow you to give that 15% to NAHS instead of to the federal government and to get a tax deduction for the fair market value of the publicly traded stock you give to NAHS.
If the stock you have has a loss, it may be more appropriate for you to sell the stock and incur the loss to allow you to take the appropriate deduction and give the net proceeds to NAHS.
In either event, it is a win for your support of NAHS. You should consult your tax advisor to
determine how this gift may benefit you.
There are several vehicles that may be used to allow you to keep the income stream for a period
of time (and maybe as long as your life) and give the remainder to NAHS. One of these vehicles is called a Gift Annuity. The gift annuity is a contract in which you make a contribution to NAHS and, in return, NAHS agrees to pay you an annual fixed dollar amount for a term of years, or your lifetime, or the lifetime of a loved one. A portion of your gift which consists of what is determined to be left after the payment of the annuity to you is tax deductible. The amount of the deduction is determined by the amount of the gift, the type of the gift (cash or securities), the length of the annuity, your age or the age of the beneficiary. Please contact your tax advisor for information specific to your situation.
Another vehicle is a Charitable Remainder Trust. There are two types of charitable remainder
trusts: Charitable Remainder Unitrust (CRUT) or Charitable Remainder Annuity Trust (CRAT). Both of these vehicles will pay you or your loved one a stream of payments for either a period of years or for your or their lifetimes. The amount paid in a charitable remainder unitrust is determined based upon a specific percentage of the fair market value of the assets in the trust on January 1st of each year. Thus, the payment stream may vary from time to time. The charitable remainder annuity trust, on the other hand, pays a specific annuity payment for each year which is determined at the time the trust is established. In either case, you may be entitled to deduct the amount which is determined to be the estimated amount of the remainder interest which will be distributed to NAHS upon your death or at the end of the term of years. A charitable remainder trust can be used during your lifetime or upon your death (a testamentary charitable remainder trust for the benefit of a loved one with the remainder to NAHS). Again, you should contact your tax advisor or your estate planning attorney to assist you in forming this vehicle.
If you desire to make sure that your family will receive the remainder of the assets, but would like to see an immediate benefit to NAHS now, consider using a Charitable Lead Trust. Using a charitable lead trust will allow the income to flow to NAHS now; and after a specific period of time or upon your death, the balance of the trust will be paid to your family. The charitable lead trust may allow for the remainder to pass outside of your estate to your heirs. Please contact your tax advisor for specific tax advice relating to this vehicle.
In DuPageCounty, there is a very capable organization which manages various trust and other
charitable gifts for persons who want to make gifts to charitable organizations such as NAHS. This organization is called The DuPage Community Foundation. For more information on how the DuPage Community Foundation may assist you, feel free to contact David M. McGowan, President, The DuPage Community Foundation, 2100 Manchester Road, Building A, Suite 303, Wheaton, Illinois 60187-4584, (630) 665-5556.
For more information, please contact Ellie at (630) 420-8989 x114 or via email.