Estate planning has emerged as one of the most important tools individuals and families can use to protect their assets and provide for their loved ones. With the right plan in place, you can help your estate avoid probate, coordinate financial and retirement planning, and ensure that your heirs are cared for when you pass away. Estate planning can also be a powerful tool for people who want to support their favorite charities. One recent gift to Avow Foundation Inc. serves as an important reminder of just how important that planning can be when it comes to charitable giving.
The Gift
Avow Foundation Inc. announced earlier this month that it had received a $795,000 gift from the estate of Nancy L. Weinig. Her estate planning attorney noted that the gift was made in appreciation of the care that Avow’s hospice services has provided for her family members and friends. She reportedly wanted to help ensure that the Foundation would have the resources it needs to continue its mission and provide that same level of loving care to other residents in the area.
Avow Foundation Vice President Melissa Phillips responded by noting that the Foundation was created due to a commitment to ensuring that residents in the community receive the end-of-life care that they deserve. As part of that commitment, Avow never refuses services to patients who need them, even when they lack the resources needed to cover the cost of that care. Donations such as Weinig’s are used to help provide that care to hospice patients in Collier County, Florida and those who need palliative care throughout the southwest portion of the state.
Avow has been providing its nonprofit hospice services for more than three decades. Its Foundation is responsible for developing the resources needed to continue the Avow mission of caring for those with chronic and severe illnesses, the terminally ill, and their families. Avow’s work remains of vital importance to seriously ill patients across southwest Florida.
The Gift’s Impact
According to Phillips, “Ms. Weinig’s gift will help cover direct patient care costs and fund special therapies such as music, massage and Reiki energy treatments, which are funded 100% by donations.” As a result, her bequest will directly benefit patients who receive care from Avow by providing them with critical hospice services that might otherwise be in jeopardy due to funding shortfalls.
Estate Planning, Charitable Giving, and You
If you have charities that you actively support, chances are that you might be interested in continuing to provide that support even after you die. Estate planning is essential for ensuring that the charitable organizations you currently support continue to receive your assistance long after you’ve passed away. There are a variety of ways that you can accomplish that goal, and some of the available options can even provide benefits for you while you’re still living.
The Charitable Remainder Trust
The charitable remainder trust is a valuable tool that can help you to make sizable gifts to your favorite charitable organizations, and increase spendable income. The charitable remainder trust comes in two basic forms: the unitrust and the annuity trust. With the former, the beneficiary receives a certain percentage of the value of the assets in the trust based on those assets annually determined market value. With the latter type of trust, the income received by the beneficiary is a set sum.
When you set up a remainder trust, you transfer certain assets to the trust and forfeit ownership over them. Typically, people choose to use assets that increase in value over time, so that they can escape capital gains taxes with the transfer. Those assets then produce income over time, and you set up the trust to pay you a certain amount of income based on either the annuity or unitrust method. When you die, the remaining assets are distributed to the charity you named in the trust.
The Charitable Lead Trust
The charitable lead trust is like the remainder trust, but operated in reverse order. You still transfer assets to the trust, and name a charitable beneficiary that receives income from the trust for a set period. When that time elapses, the trust distributes the remaining assets to your chosen heir or heirs. You still receive the tax benefits provided by the remainder trust, but do not receive any additional income benefits.
Which One is Superior?
Naturally, some people are confused about which type of charitable trust offers a superior solution for their giving needs. Both are useful tools, but your individual needs are likely to be the main determining factor when it comes to choosing one over the other. With the remainder trust, you can continue to benefit from the assets over time, but the charity won’t receive any benefits until you die. The lead trust offers immediate benefits for charitable groups and eventually provides assets to your heirs, but offers you no income advantages.
Ultimately, the type of charitable trust that you choose to use will depend on these and other factors:
- How quickly do you want the charity to receive its money? Larger charities with broad appeal can typically wait longer than smaller charities with fewer resources.
- Do you need the extra income, or would you prefer that assets eventually pass to your heirs?
- Do you need any of these benefits? If not, you may just want to create a specific bequest that leaves a sum of money directly to the charity.
Get the Help You Need
The estate planning experts at Kulas & Crawford, Medicaid & Estate Planning Attorneys, can help you to find the charitable trust solutions that you need to facilitate your giving plans. Charities around the country depend on gifts like those made by the Nancy L. Weinig Estate, and your charitable giving can be an invaluable part of any charity’s ongoing mission in the community. At the same time, however, it is important to ensure that your broader estate needs receive the attention they deserve too. If you want to learn more about how you can make charitable giving a part of your estate planning efforts, contact us at our website or call us today at (772) 398-0720.
