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Other Assets
If there is a reasonable expectation that Sioux Empire United Way can sell these assets and invest the proceeds in its endowment, Sioux Empire United Way will accept gifts of closely held stock or tangible personal property. If you have held the stock for more than one year, you may claim a charitable tax deduction of the fair market value of these assets, without paying capital gains tax on the appreciated value. Your charitable tax deduction for personal property the United Way sells is limited to what you paid for it.
Bequests by Will
By far the most popular means of gift planning. Many donors find that a will is the most convenient way of benefiting the community as well as an effective way to reduce estate taxes.
Contingent Bequests
Most people have family obligations which are their primary motive for executing a will. An ideal plan might include a contingency, in case family or friends predecease you, providing that the estate is directed to benefit your United Way.
Life Insurance Policies
There are a number of ways you can use existing life insurance policies as a means of giving to the United Way. You may give an existing life insurance policy to United Way or establish a new charitable life insurance policy. Your insurance agent can assist you to transfer policy ownership to the United Way. You can also name Sioux Empire United Way as one of the beneficiaries of your current policy. The gift of a paid-up policy may result in substantial tax savings.
Retirement Assets
Donating retirement assets is one of the best ways to make a charitable gift because it is easy and because it avoids the double taxation of income and estate taxes that can diminish its value to your heirs (the loss is often close to 70%). When you name Sioux Empire United Way as the beneficiary of your Individual Retirement Account (IRA), pension plan, 401(k) or other retirement account, the proceeds are free from income tax, estate tax, and generation-skipping taxes. Donations can also be made by creating a charitable trust that is funded with an IRA or other retirement account.
Charitable Gift Annuities
If you need the income from cash, marketable securities, or real estate to supplement your retirement income, a charitable gift annuity may be a good planned gift alternative. A charitable gift annuity is a guaranteed income plan which also provides lasting benefits to your community. Assets are transferred to United Way with agreement that a fixed rate of return will be paid to the named beneficiary (ies) for life. At death the principal goes to Sioux Empire United Way.
Charitable Remainder Trusts
You may also transfer assets to separately managed irrevocable trusts and use them to create income ¾ at least 5% annually ¾ for yourself and others. Assets are placed in a trust, the earnings from which are paid as income to you and your beneficiaries. Upon the death of the last beneficiary, the principal goes to Sioux Empire United Way.
Charitable Lead Trusts
Assets are placed in a trust for a specified period of time. Income from the principal goes to Sioux Empire United Way during the life of the trust. The principal goes to your beneficiaries when the trust terminates. There are many variations on charitable lead trusts. Some produce charitable tax deductions; others produce gift or estate tax savings. The Sioux Falls Area Community Foundation will work with your attorney and a trustee of your choice to identify the correct structure for you.
Many of the above mentioned options may be funded with the appreciated securities resulting in the avoidance of capital gains taxes.
Click here to receive more information on a few of the giving strategies listed above from United Way of America. |