Read in English Leer en Español

6 Different Ways to Give With Legacy Funds

Have you ever considered opening a legacy fund?

Legacy funds allow you to communicate how you would like an estate gift tax to be administered. They have no assets in them until a gift is received from an estate.

Fiscal responsibility and transparency are crucial considerations when making decisions about establishing a fund. And the kind of assurance you desire is made possible if you work with a sustainable organization.

6 Types of Legacy Funds

There are six different ways you can give a gift in the form of a legacy fund:

  1. Will or Living Trust
    A charitable bequest can be made in your will or living trust. You simply identify an organization as the beneficiary of a given amount, a percentage, or the residue of your estate, and that organization works with you to ensure your wishes are honored.
  2. Qualified Retirement Plan
    Many people have assets in a qualified retirement plan to provide financial security during retirement. A portion of these assets will often remain after passing. If you plan to pass those assets on to anyone but your spouse, they will be subject to taxation equaling as much as 80 cents or more on the dollar!Making a trusted organization the successor beneficiary to your spouse for those remaining assets gives the full dollar value to support your charitable goals, while removing the assets from your estate for tax purposes.
  3. Charitable Remainder Trust
    A charitable remainder trust (CRT) permits you to make a gift and receive income in return. By using a charity, you can establish a fund with the trust assets to support important charities. The charity receives the assets at the end of the trust’s term and provides ongoing stewardship of your charitable wishes.There are additional benefits to this option if you use appreciated assets to fund the trust, as you will not be subject to capital gains taxation. You will also be entitled to an income tax charitable deduction.
  4. Charitable Lead Trust
    The charitable lead trust (CLT) is the reverse of the CRT. The trust distributes income to the charity for a period of years or throughout your lifetime, with the assets returning to you or, more typically, to family members. The CLT allows you to make a significant gift to charity and transfer assets to family members with reduced or no gift and estate taxes.
  5. Charitable Gift Annuity
    A charitable gift annuity is similar to a CRT, providing a guaranteed income stream to you and your spouse or someone else for the rest of your lives. You transfer the property to a charitable organization and receive a charitable tax deduction for a portion of the transfer. You also avoid capital gains tax and future estate taxes on appreciated gifted property.
  6. Life Insurance
    Many individuals have a paid-up life insurance policy that has been filed away, perhaps originally intended for children who are now grown or have sufficient assets of their own. Making an organization the owner and beneficiary of such a policy provides an income tax deduction and is a wonderful gift to support important charities.

Learn More

We honor the philanthropic legacy of our donors. As you think about the long-term change you will make in the causes you care about most, we hope you will consider The Foundation as the vehicle to make it happen. Click the button below to learn more.

Learn More

Related Content