Explore Your Options
Thank you for your interest in supporting ECS with a planned gift. We hope the table below will help you determine the best planned giving option for you. Anyone in the world can make a planned gift to ECS, but there are particular tax benefits for U.S. citizens.
|
|
||
| I want to… | Planned Giving Strategy | How It Works |
|
|
||
| Afford a larger gift to ECS while avoiding capital gains tax liability | Give appreciated stocks or bonds that you have held for over one year |
By buying low but giving high, your gift costs you less than the benefit to ECS. Plus, you avoid capital gains tax. |
|
|
||
| Provide for ECS’s future without impacting my current cash flow | Make a bequest to ECS in your will | Bequests to ECS benefit the Society without costing you anything during your lifetime. Bequests can be modified to address changing circumstances and still allow you to provide for family or heirs. |
|
|
||
| Afford a larger gift to ECS while retaining the income benefits from that gift | Create a charitable gift annuity or trust | Annuity and trust benefits vary, but generally allow you to claim a charitable tax deduction for the gift and to receive income from the gift for you or your heirs. |
|
|
||
| Utilize an often overlooked asset to support ECS while reducing my income tax liability | Take advantage of the Charitable IRA Rollover provision |
If you are at least 70½ years old, you may make a gift to ECS from your IRA account. The gift counts towards your required minimum distributions and is free from income tax. |
Gifts of appreciated stocks or bonds
If you have owned appreciated stocks, bonds, or mutual fund shares for one year or more, you may transfer them to ECS as a donation. ECS then sells the securities and uses the proceeds to support the Society. You pay no capital gains tax on the transfer and receive an immediate income-tax deduction for the fair market value of the securities on the date of transfer regardless of what you originally paid for them.
Bequests to ECS
Including ECS in your will or trust allows you to support your charitable interests while retaining complete control of your assets during your lifetime. A bequest to ECS can be a specific dollar amount, a percentage of your estate, or the remainder of your estate after other bequests have been satisfied. As an added bonus, under current U.S. tax law there is no upper limit on the estate tax deduction for your charitable bequests.
Charitable gift annuities and trusts
Charitable gift annuity
With a charitable gift annuity, you transfer cash or securities to ECS. In return, ECS then pays you or a named beneficiary fixed income for life. You receive an immediate tax deduction on a portion of your gift, and a portion of your annuity payment will be tax-free. When the contract ends upon the death of the last beneficiary, the remaining balance passes to ECS.
Deferred gift annuity
A deferred gift annuity works just like a charitable gift annuity—you transfer cash or securities to ECS and in return receive fixed annuity payments for you or a named beneficiary life. However, with a deferred gift annuity, you specify a date in the future to begin receiving payments, rather than receiving them right away. This permits a higher annuity rate and may generate a larger charitable tax deduction. You can target your annuity payments to begin when you need them, for example when you retire. As with a charitable gift annuity, the remaining balance of the gift passes to ECS upon the death of the last beneficiary.
Charitable remainder trusts
With a charitable remainder trust, you transfer cash, securities, or other appreciated property into a trust, which then pays you or your beneficiaries for life or a set period of time. A charitable remainder annuity trust makes fixed annual payments to you or your named beneficiaries. A charitable remainder unitrust, on the other hand, pays you an annually calculated percentage of the principal value and allows you to continue making gifts to the trust for additional income and tax benefits.
In both cases, when the trust terminates, ECS receives the remainder to use as you have directed. In addition to receiving income for life in return for your gift, you also receive an immediate income tax deduction for a portion of your contribution and avoid upfront capital gains tax on any appreciated assets you donate.
Charitable lead trust
With a charitable lead trust, you contribute securities or other appreciated assets to the trust, which then makes fixed annual payments to ECS for a set period of time. When the trust terminates, the remaining principal is paid to your heirs. By making income payments to ECS for a set time, you support your charitable goals while reducing the ultimate tax burden of transferring your assets to your heirs. Further, any appreciation that takes place in the trust passes tax-free to the individuals named in the trust.
Charitable IRA Rollover
The U.S. Congress has retroactively reinstated and made permanent the provision that allows donors age 70 ½ years and older to make tax-free gifts from their IRA accounts. Under this scheme, your distribution must go directly from your IRA to ECS. The gift counts towards your annual required minimum distributions but is not included in your adjusted gross income. Although the gift will not generate an income tax charitable deduction, it will be free from income tax, making it a clear tax win for most donors.
If you would like to give in this way, you will need to call your IRA administrator to learn how they can process your rollover request. Some companies can do this over the phone, while others require a letter requesting a direct charitable distribution. ECS is happy to provide sample IRA distribution request letters for this purpose.
Next Steps
Different planned gift options require different arrangements. The most important thing is to talk to a financial advisor, accountant, or attorney and leave clear instructions. Those wishing to learn more about planned giving with ECS should contact our Development Office at development@electrochem.org or 609.737.1902 ext. 102.
