Types of Charitable Giving to The Rudder Association

 

Below is a summary of some common charitable giving options. These are not offered as professional tax or legal advice and may not apply in all cases. Please consult your tax, legal and financial advisors about your specific situation.

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Cash

 

Checks, ACH transfer from your bank, wire from your bank.

 

Gifts of Appreciated Stock

 

Gifts of appreciated stock, held one year or longer, have the advantage of avoiding capital gains to the donor.  TRA receives the stock, the donor receives a receipt for the stock at its then market value.  TRA sells the stock, pays no capital gains tax and applies the proceeds for its charitable purposes as agreed with the donor.

 

Bequests

 

A bequest through a will is the most common type of planned gift, and does not draw on assets during a donor’s lifetime. Bequests can be estate distributions of cash, securities, real estate, or personal property. Types of bequests include a percentage amount, a fixed-dollar amount, the residue of an estate, and a contingent amount. Important estate tax savings may result from a bequest. Contact us for suggested bequest language.

 

 

Charitable Remainder Trusts (CRTs)

 

CRTs allow a donor to make a gift to The Rudder Association while at the same time achieving several other financial objectives. When you create a CRT, you irrevocably transfer money, securities, real estate, or other assets to a trust that will then pay you an income for life or for a period of years. If you wish, the trust also can pay an income to another beneficiary. At the death of the trust income beneficiary or after a term of years, the remaining principal in the trust goes to The Rudder Association. Several types of CRTs allow the donor to tailor their gifts to best serve their own needs.

 

 

Life Insurance

 

Many donors choose to give life insurance policies to The Rudder Association either as an immediate gift or as a provision upon their passing. This can be an easy way to make a gift to The Rudder Association without revising your will and may have advantageous estate tax consequences. This can be a new or existing life insurance policy. Donors may make the The Rudder Association either a primary/contingent beneficiary or an owner and beneficiary of a life insurance policy. Donors who consider giving life insurance policies do so because they have no heirs, their estate situations have changed to where do not need life insurance proceeds or because they already have made provisions for heirs through other financial vehicles. Contact us for the information to put on the beneficiary designation form.

 

Retirement Plans

 

Donors may consider making The Rudder Association a primary or contingent beneficiary of a percentage of their pre-tax qualified retirement plan, such as an Individual Retirement Account, 401k, 403b or Thrift Savings Plan to name a few. This is done via a beneficiary designation form.  These pre-tax assets are received by a qualified non-profit free from income tax liability, leaving other tax friendly assets available to pass along to your family and other heirs. Contact us for the needed information to put on the beneficiary designation form.

 

IRA Qualified Charitable Distribution (QCD)

 

Are you 73 years of age or older and faced with the requirement of taking unneeded mandatory distributions from your Individual Retirement Account (IRA)? Have you considered funding charitable contributions to The Rudder Association with your required minimum distribution (RMD)?

 

Charitable gifts made directly from your IRA to a qualified charity will count towards your RMD for the year. While your gift cannot be claimed as a tax deduction, IRA withdrawals donated directly to charity are not counted as income. You will not owe income tax on the withdrawal. Assuming that you do not need the distribution for living expenses, using your RMD may be the answer for your charitable giving.

 

Donors aged 73 or older are limited to a maximum of $100,000 in any one year as an IRA charitable distribution. However, there is no requirement that the entire amount be made in one transfer or that the entire amount go to a single qualified charitable organization. You can request multiple direct transfers from your IRA to qualified charities in a year, but only $100,000 will be excluded from income as an IRA qualified charitable distribution. The distribution must be made directly from the firm that holds your IRA to the qualified charity.

 

If you are interested in learning more about ways to use your RMD to fund your contributions to The Rudder Association, please contact Mark Browning ’88 at markbrowning88@gmail.com.

 

The summary above is provided for general reference.  As with all legal and financial matters, we recommend that you consult with your personal legal, tax and/or financial advisors before funding your gift.