TRUSTS & INSURANCE
CHARITABLE LEAD TRUST
BENEFITS TO YOU
- Transfer appreciated property to family members at low cost
- Reduce the burden of gift taxes, probate costs and estate taxes
- Useful in a year in which you have a large amount of taxable income-use as a large current income tax deduction
- Receive the income payments by establishing a donor advised fund, then enjoy recommending grants to your favorite charities over time
A charitable lead trust allows you to "donate the fruit and keep the tree"—or make significant charitable gifts now while later transferring wealth to your heirs at reduced tax values. Through the trust, you determine how much will be paid to BTCF and for how long. The principal that remains after the trust terminates will revert back to you or pass to another designated individual. Charitable lead trusts are an effective tool for excluding assets—and subsequent appreciation on those assets—from your taxable estate, while ensuring your favorite causes receive significant charitable support and providing for your loved ones at the end of the trust term.
Minimum to establish a charitable lead trust: $250,000
CHARITABLE REMAINDER TRUST
BENEFITS TO YOU
- Make a significant gift to charity
- Provide a lifetime income for yourself and/or your beneficiaries
- Reduce your taxable estate
- Avoid immediate capital gains tax when the gifted asset is sold
- Realize an income tax charitable deduction
- Increase income by converting low—yield assets
Giving through a charitable remainder trust can support BTCF's future grantmaking while providing you, or someone you select, with income for life or a specified number of years. This option allows you to "donate the tree and keep the fruit." You do this by placing cash, property or other assets irrevocably into a trust, which distributes an annual income for life or for the duration of the trust to the income beneficiary. The payments can be a fixed dollar amount (an annuity trust) or a percentage of the principal (a unitrust). Charitable remainder trusts offer a great deal of flexibility. Payments may be made to you throughout your life, and then directed to your spouse or other beneficiaries after your death. Or, the trust may be set up by your will, benefiting a loved one for his or her lifetime. The eventual distribution to BTCF will take effect only at the end of the trust term.
Minimum to establish a charitable remainder trust: $250,000
INSURANCE
BENEFITS TO YOU
- A simple and inexpensive way to create a significant future charitable legacy
- A charitable deduction at time of gift on the current value of your paid—up policy
- If a premium—due policy is donated, receive an additional tax deduction for annual gifts to charity for annual premium payments
Giving a life insurance policy is an inexpensive way to make a substantial contribution to BTCF. Many people find in later years that they don't need all the insurance they did when they were younger, or they may choose to purchase a new policy to donate in order to leverage their gift. Three common methods allow you to turn life insurance policies into a charitable gift:
- OPTION 1: List Berkshire Taconic Community Foundation as the beneficiary when purchasing a new life insurance policy, or execute a simple change of beneficiary form on a current policy. Upon your passing, your estate receives a charitable deduction and the death benefit passes to BTCF tax—free.
- OPTION 2: You may donate an existing, paid—up life insurance policy to BTCF or purchase a new paid—up policy in BTCF's name. You should receive a current income tax deduction equal to the lesser of your basis in the policy or the policy value.
- OPTION 3: You may transfer an existing insurance policy or purchase a new policy and name BTCF as the owner. Every year, you donate sufficient funds to BTCF to pay the annual premiums.
