Planned Giving Gift Models Arthritis Foundation

Planned Giving Options: How to Give – Part Two

Help us champion the fight against arthritis with planned giving! In our past posts in the Planned Giving Series, we discussed the type of planned gifts we accept and an overview of planned giving to help you better understand how planned gifts differ from other types of donations to the Arthritis Foundation.

In our last post about how to give (part one), we talked about several types of gift models we accept that have multiple benefits for you and your loved ones, including bequests, beneficiary designation gifts, charitable gift annuities and more. Below, we’ll discuss additional alternate types of planned gifts you can make, which will help make a difference in the lives of those with arthritis for years to come!

Charitable Lead Trusts

Charitable lead trusts are an excellent way to pass on some of your assets to your heirs while reducing or eliminating gift or estate taxes. Benefits of this type of planned gift include:

  • Receiving a gift or estate tax charitable deduction
  • Passing inheritance on to heirs free of gift and estate tax
  • Creating a trust that allows you to make annual gifts to the Arthritis Foundation

When you establish the trust, you make a contribution of your property to fund a trust that pays the Arthritis Foundation a predetermined amount for a set number of years. At the time of the donation, you will receive a federal gift or estate tax deduction. After the period is up, the trust will “end,” and the assets remaining in the trust will go towards your loved ones, free from federal gift and estate tax.

Sale and Unitrusts

If you are disappointed in your appreciated assets (e.g. stocks, bonds, or real estate), because they aren’t producing the income you expected, you might decide to sell the assets and cut your losses. However, if you sell your appreciated assets, you will pay a large capital gains tax. By creating a charitable remainder unitrust, and transferring a portion of your assets to the trust, you may be able to avoid this tax and help the Arthritis Foundation raise vital funds that we need to chart the course for the arthritis community.

Benefits include:

  • Receiving cash from the sale that you can use to save for retirement, travel, meet other financial goals or purchase another residence
  • Receiving income from the unitrust for the rest of your life
  • Obtaining an income tax deduction that may reduce your annual tax bill

You will receive a reliable stream of income from the trust for the rest of your life – and the remainder will be leveraged by us to help find a cure for arthritis. 

Bargain Sales

If you have property that you want to sell, and if you’re looking for a way to reduce your income taxes, you might consider a bargain sale.

Benefits include:

  • Avoiding capital gains tax on your charitable gift
  • Receiving a tax deduction to reduce your annual tax bill
  • Receiving cash from the sale, which can be reinvested or saved for retirement

This method combines the benefits of a traditional cash transaction with the tax-deductible benefits of a charitable donation. With a bargain sale, you will sell your property to the Arthritis Foundation and receive cash at closing, and you can receive a charitable deduction for the value of your gift! Bargain sales can still be accomplished, even if you still have a mortgage on your property, but we highly suggest speaking to your financial consultant before engaging in this gift model to find out what your specific options may be.

Give it Twice Trusts 

This charitable remainder unitrust is a popular option that allows you to provide your children with income while making a much-needed gift to the Arthritis Foundation. We call this a “Give it Twice” trust, because you can use the trust to first give to your family for a number of years and then distribute the rest of the trust to us.

Benefits of this gift model include:

  • Using the full value of your retirement account to provide income to your spouse, children, or other loved ones for a predetermined period of time
  • Receiving an estate tax deduction and savings from your gift

The Arthritis Foundation can partner with you and your attorney to create a Give it Twice Trust. How does it work? First, you’ll complete an IRA or retirement account beneficiary designation form, which will name the Arthritis Foundation as your beneficiary. When you pass away, your retirement account will be transferred to the trust, which will provide your family and loved ones with income for life or for a predetermined amount of years. Once these payments stop, the balance of the trust will be transferred to us so we can continue working hard to lead the fight for the arthritis community.

Life Estate Reserved

If you want to leave your home or farm to us (and receive a charitable income tax deduction), then a life estate reserved may provide you with the solution you need! Benefits include:

  • Receiving a federal income tax deduction for the value of the remaining interest in your property
  • Preserving your lifetime use/control of your home or farm
  • Creating a life estate that preserves the use of your property for you and a loved one (e.g. your spouse or child)

To make a life estate reserved, first deed your home or farm to the Arthritis Foundation. Speak to your lawyer about crafting language in the deed that includes a provision allowing you (and your loved ones) the right to live on and use your home or farm for the rest of your life. Second, you and the Arthritis Foundation will sign an agreement outlining that you will keep the property in good condition, maintain property insurance and pay property taxes. When you (and any heirs or loved ones named in the deed) have passed away, your home or farm will be transferred to the Arthritis Foundation. We will sell or use the property to continue making strides towards finding a cure!

Questions? Ask Our Experts!

Talk to our team to find out more about planned giving or the numerous types of planned gifts we accept. Just fill out our short form, call 866-528-8687 or email to learn more. You can also read the remaining posts in our series to learn more about how to help the Arthritis Foundation lead the fight against arthritis!

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