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Planned Giving |
Gift OptionsWill and Bequest A will or bequest is a legal document that spells out the disposition of one’s assets at death. It is governed by state law and is the most basic element of an estate plan. In many cases, the will provides that the assets funded by a revocable trust be distributed to heirs and beneficiaries. This is a simple option that allows you to enjoy all of your assets while you are alive, yet support your favorite causes at death. Gift of retained life estate This technique allows, under the right circumstances, for the transfer of your residence to the Michigan Opera Theatre Endowment Fund at the Community Foundation at your death while you still live in it. Even though you remain in your home until death, this may generate immediate income tax deductions for you. Retirement Assets Retirement assets are assets such as pensions, profit sharing, 401(k) and 403(b) plans and IRAs. Similar to life insurance, retirement assets can easily be gifted to the Michigan Opera Theatre Endowment Fund at the Community Foundation. This is done by changing the beneficiary designation for the retirement asset. In addition, this can reduce income taxes payable by the donor’s family as well as save on estate taxes. Outright gift A simple gift of cash or property such as a security, real estate, collectible, life insurance policy in which donor retains no interest and can be used right away by charity. Life Insurance There are several methods by which a life insurance policy may be contributed to a charity. A donor may:
In the case of Michigan Opera Theatre, only a single-premium or other existing paid-up insurance policy irrevocably assigned (as owner and beneficiary) to the Community Foundation, and designated for Michigan Opera Theatre Endowment Fund. The contributed policy must meet the high-quality rating standards of the various insurance-rating agencies. The Community Foundation must receive the insurance contract and all related documents showing the Foundation as the irrevocable owner and beneficiary of the policy, as well as documentation of the policy’s value for tax purposes. Pooled Income Fund The Pooled Income Fund is a trust in which contributions are commingled for investment purposes. When donors make gifts to the pooled income fund, units are assigned to them or their named beneficiaries. The net income from the fund is paid to each beneficiary on the basis of the number of units (s) he possesses. A pooled income fund arrangement can be established starting at $5,000. In the case of Michigan Opera Theatre, when a donor’s sole or surviving beneficiary dies, the value of that person’s units are separated from the fund and distributed to Michigan Opera Theatre Endowment Fund at the Community Foundation. Charitable Gift Annuity/Deferred Charitable Gift Annuity The Charitable Gift Annuity is not a trust. It is a contract between the charity and the donor and can be established at the minimum level of $10,000. In the case of Michigan Opera Theatre, who has partnered with the Community Foundation for Southeastern Michigan to build its endowment fund, and has established an endowment fund at the CFSEM, the Charitable Gift Annuity is a contract between the Community Foundation and the donor and is secured by the Foundation’s assets. The Community Foundation agrees to pay the donor (or a person named by the donor) a lifetime annuity in return for a gift of cash or marketable securities. The payment may continue for the life of a second individual, such as a spouse. The payment is a fixed sum, payable monthly, quarterly, semi-annually, or annually, the amount of which is based on the size of the gift and the number and ages of the beneficiaries. Rates of return under a charitable gift annuity are lower than the rates offered by commercial insurance companies so that a significant residuum will remain for the charity. The annuity may be an immediate annuity (payments to begin within one year) or deferred for a period of years, agreed upon by the donor and the Community Foundation. Charitable Remainder Annuity Trust A Charitable Remainder Annuity Trust pays a fixed amount that must be at least 5 percent of the fair-market value of the assets initially contributed to the trust. This amount does not change, and no additional gifts may be made to the annuity trust after its creation. Charitable Remainder Unitrust A Charitable Remainder Unitrust pays a fixed percentage (at least 5 percent) of the fair-market value of the trust assets, which are valued annually. Because the value of the assets can be expected to change from year to year, the unitrust payment will vary in amount each year. Additional contributions may be made to the trust after it is established. There are several variations of the unitrust:
Charitable Lead Trust A Charitable Lead Trust is a trust established by the donor and administered separately, similar to the Charitable Remainder Trust. However, it provides for payments to the charity with the remaining trust assets returning to the donor, or transferred to the donor’s family. Gift of real estate This gift occurs when a donor transfers title of a personal residence or farm to charity and retains the life estate interest while charity retains the remainder interest. Life estate interest is the donor’s right to use the property for a term of years or their lifetime and/or another person. Remainder interest is charity’s right of ownership to the property after life estate has expired. |  | | | |
Please call Kim-Lan Trinh, Associate Director of Development, Planned Giving & Major Gifts, at 313-237-3408, or email ktrinh@motopera.org, for more information and assistance. |
For more information, please call Kim-Lan Trinh, Associate Director of Development Planned Giving & Major Gifts (313) 237-3408 | |||
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