Gift Assets
It’s always wise to consider donating assets other
than cash to the Delaware Community Foundation, including those
listed below. For further information, contact your personal
financial advisor or Jane Vincent, Senior Vice President for
Development, at 302/504-5237
or jvincent@delcf.org.
Appreciated stock
As long as the securities have been held more than
12 months, it is possible to take an itemized income tax deduction
for their full fair market value up to 30 percent of adjusted gross
income. In addition, you can eliminate the capital gains tax that
would otherwise be due if the securities were sold. See
Stock Transfer Instructions to learn how to transfer your stock
using one of the brokerage houses where the DCF maintains accounts.
See Stuart Pratt
Retirement plan assets
If you plan to make a charitable bequest, consider
the advantages of transferring your retirement plan assets to
charity instead of to your heirs. Retirement plan assets produce
taxable income; therefore, an heir will pay income tax on
disbursements from a decedent's profit sharing plan, 401(k) plan or
IRA. Most other assets that an heir inherits are free from income
tax.
It is usually better to transfer the taxable assets
that are subject to income tax to a tax-exempt charity – such as the
Delaware Community Foundation — and to transfer the non-taxable
assets that are not subject to income tax to heirs.
For a taxable estate over $3 million, the
combination of estate and income taxes will frequently exceed 75
percent of the total amount – even more if the generation skipping
transfer taxes are triggered. At a cost to your heirs of only 25
percent of the fair market value of these type of assets, you could
apply 100 percent of the assets to a named charitable fund at the
Community Foundation to accomplish your specific charitable
objectives.
See A Planner's Perspective: Charitable Remainder Trusts
See "When A Charitable Trust
Beats a "Stretch IRA"
Life Insurance Gifts
If you’re like most people, you purchased Life
Insurance policies to protect your family, business or estate. If
you have now arrived at a stage of life when you don't need as much
insurance, you may want to consider using your policies for
charitable giving through the Delaware Community Foundation. Gifts
of Life Insurance may be used to establish any type of fund at the
DCF.
There are two ways to donate Life Insurance to
the Delaware Community Foundation. The reasons to consider each type
of gift are listed below
The Delaware Community Foundation as Owner and
Beneficiary
Make an irrevocable assignment of an insurance
policy to the Foundation.
-
You will receive a federal income tax charitable
deduction in the year of the assignment.
-
The value of the deduction is equal to the lesser
of the policy's replacement value or the cost (in terms of net
premiums paid).
-
If the policy is not yet paid up, an income tax
deduction is also allowed for contributions made to the Foundation
to pay subsequent premiums.
The Delaware Community Foundation as Primary or
Contingent Beneficiary
Name the Foundation as primary beneficiary of your
insurance. Or, if you'd rather that a member of your family remain
the primary beneficiary, make the Foundation the contingent, or
successor, beneficiary. The Foundation will receive the proceeds if
your primary beneficiary predeceases you.
How you benefit:
-
You retain ownership of the policy.
-
You have access to the cash value and can use the
policy as collateral.
-
You have the right to change the beneficiary.
-
Any proceeds payable to the Foundation at the time
of your death will not be subject to federal estate tax.
-
However, there is no charitable deduction for the
value of the policy upon designation of the Foundation as
beneficiary or for subsequent premium payments.
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