In its simplest form, planned giving enables individuals to make larger gifts to non-profits than they might otherwise be able to from their ordinary income. Planned giving can occur during life, at death, or a combination of the two. It is imperative to seek professional tax advice before any type of planned giving is put into place.
There are three basic types of planned giving, each with their own benefits.
1) Outright Gifts. These are typically made with cash or appreciated assets, such as securities or real property. The donor receives a tax benefit. However, care must be used when making large outright gifts; once an outright gift is made, it is gone and irretrievable.
2) Gifts that Return Income to the Donor. Examples of these are charitable gift annuities, or charitable remainder trusts. Unlike an outright gift, both provide fixed payments to the donor, with the remaining assets passing to the charitable organization(s) named by the donor at the donor’s death.
3) Gifts Payable at the Donor’s Death. Also called “Legacy Giving”, these are gifts made through the donor’s Will, Trust, or beneficiary designation. They may be a set dollar amount, or a percentage of the overall estate’s value. It is important to remember that gifts of specific dollar amounts are distributed before those set by percentages, and care must be used if making large monetary gifts so as to not unintentionally consume the estate, leaving little- to-nothing for the “residuary beneficiaries,” those we typically think of as receiving the bulk of our estate. No charitable deductions are available for this type of gift; however, it may affect one’s estate tax liability, especially for Oregon residents.
Drescher Elson Sperber, PC supports all types of charitable giving. We work closely with our clients who want to include planned giving in their estate plans. We also collaborate with organizations in creating simple and inexpensive ways for their donors to include them in their estate plans. We have a formal relationship with Southern Oregon Repertory Singers, and are proud to be the Legacy Giving Legal Partners of the Oregon Shakespeare Festival.