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A bequest is a gift made through your will that directs your estate executor to make a gift from your assets to the person or institution of your choice. Bequests may be used to provide gifts of money, stocks, real estate, or other property such as art or jewelry. When donors leave a bequest to Virginia Western, they can make a generous gift without reducing their current income or giving up ownership of the assets during their lifetime. Donors can create funds in their name or in memory of a loved one. Charitable bequests are usually deductible in full for estate tax purposes.
To leave a bequest to Virginia Western, contact Carole Tarrant, Coordinator of Development at 540-857-6281 or .
One frequently overlooked way donors can make a charitable contribution is by using qualified retirement assets. Subject to income and estate tax, retirement plan assets are among the most taxed assets at death in larger estates. While current tax law does not allow the donor to transfer these assets directly to Virginia Western, the donor can name the Virginia Western Educational Foundation as the beneficiary on the account during his or her lifetime and, by doing so, may be able to avoid both income and estate taxes upon his or her death.
To name Virginia Western as a beneficiary for all or any of your retirement plan assets, contact Carole Tarrant, Coordinator of Development at 540-857-6281 or .
A gift of life insurance policy can be a great way to combine charitable objectives with tax advantages to donors since donors may receive an income tax deduction by naming Virginia Western as a partial beneficiary or owner of a life insurance policy. You can name Virginia Western as a designated or alternate beneficiary of a life insurance policy, a deferred annuity contract, an IRA, a defined benefit plan, a 401(k) plan, a defined profit sharing plan, or other qualified plans.
There are several ways for donors to make gifts through their life insurance. Some of the most popular options are:
- Purchase a policy and designate Virginia Western as the irrevocable owner and beneficiary of the policy.
- Designate Virginia Western as the new owner or beneficiary in an existing policy.
- Add Virginia Western to an existing policy as a remainder or final beneficiary, in case the primary or secondary beneficiaries do not survive you.
To make a gift of a life insurance policy to Virginia Western Community College, contact Carole Tarrant, Coordinator of Development at 540-857-6281 or .
Charitable remainder trusts allow you to transfer assets into a separately managed trust that will provide you and/or your beneficiaries with fixed percentage payments for life or for a set period of time. The person who establishes the trust selects the trustee as well as the charities or non-profits, such as Virginia Western Educational Foundation, that will receive future distributions. The donor earns a charitable deduction when the assets are transferred to a trust. Upon termination of the trust, the remaining assets are distributed to the charity and will be used for the charitable purpose specified by the donor.
To establish a charitable remainder trust to Virginia Western, contact Carole Tarrant, Coordinator of Development at 540-857-6281 or .
With a charitable annuity trust, the donor transfers assets to the Foundation in exchange for a guaranteed, fixed annuity payment to them or one other beneficiary for life. The annual payment is a fixed sum, the amount of which is based on the size of the gift and the number and ages of the beneficiaries. In addition to the charitable deduction, a portion of the annuity payment is generally tax-deductible. Upon the death of the donor, the Educational Foundation receives the full amount of the initial gift to use as specified by the donor.
To establish a charitable annuity trust to Virginia Western, contact contact Carole Tarrant, Coordinator of Development at 540-857-6281 or .
While most charitable gifts are made in the form of cash, important advantages can be possible when gifts are made using non-cash property that has increased in value.
Each year more people discover that their estates are surpassing the value at which such taxes are levied.
Through careful planning of your charitable gifts, it can be possible to meet multiple goals. By choosing the best property to fund your gifts, their timing, and the methods used to make them, you may find you can give more while minimizing or eliminating federal estate and gift taxes and preserving or actually enhancing your financial well-being.
This information is intended to help guide you through the gift planning process. More information is available to you and/or your advisors on request.
When stocks, bonds, mutual funds, real estate, and other appreciated assets are sold, tax is due on any capital gain.
One of the only ways to avoid or delay the capital gains tax is to make a charitable gift of the property. When you give appreciated property that has been held long-term, you may take a deduction based on the current value of the property rather than just its cost.
The combined benefits of bypassing tax on the capital gain, receiving an income tax deduction, and making a charitable gift can be very gratifying.
Many of the plans described here can be a welcome addition to your retirement plans. If you have property that has increased in value but yields little income, using it to fund a charitable gift plan can help your assets do double duty.
The life income you receive from the gift plan will be based on the full value of your property, not just what would be left after you paid tax on the gain. You will also enjoy tax savings from the deduction you receive when you create the plan. This amount can be invested for greater income.
By carefully planning your gifts, you can substantially increase income from investment assets, while receiving the satisfaction of making a very meaningful gift in the process.
Richard Tuley, 77, has been retired for five years. He has $100,000 worth of growth stocks, which cost $35,000 and yield two percent. He would like to receive more than the $2,000 per year in income that this asset currently yields. His tax bracket is 36 percent. If he sold the securities, he would owe a capital gains tax on the $65,000 increase in value. He would thus have considerably less than $100,000 left to invest after paying the tax. If, instead, he placed the stocks in a charitable remainder annuity trust with a payout rate of seven percent, his income from the property would more than triple to $7,000 per year. He would not incur tax on the $65,000 gain at the time of his gift, but he would receive income based on the entire $100,000. His income tax deduction would be approximately $41,000. Mr. Tuley's federal income tax savings from the gift would be nearly $15,000. His savings would be even greater if he were taxed at higher state and federal rates.
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