"Each one must give as he has decided in his heart, not reluctantly or under compulsion, for God loves a cheerful giver."
-2 Corinthians 9:7
An outright gift to God’s work is just as its name implies: a gift transferred immediately from you to God through His agencies. It can include cash, securities, tangible personal property or real estate. Because of the income tax charitable contribution deduction, the net cost to you of a cash gift is lower than the face value of the gift. Gifts of cash are fully deductible up tp 50% of your adjusted gross income. It has been said "Dying legacies are a miserable substitute for living benevolence. The servants of God should be making their wills every day, in good works and liberal offerings to God.” Counsels on Stewardship, p.326
Deferred Annual Annuity
Giving to God...Receiving a Future Lifetime Benefit : A Deferred Gift Annuity is similar to a Charitable Gift Annuity, the difference being only that the Annuitant(s) receive payments at a future time, the date chosen by the donor, which must be more than one year after the date of contribution. As with a CGA, payments can be made monthly, quarterly, semi-annually or annually.
Charitable Gift Annuity
Giving to God...Receiving a Lifetime Benefit : A Charitable Gift Annuity (CGA) is a contract (not a trust), under which a charity, in return for a transfer of cash, marketable securities or other property, agrees to pay a fixed amount of money to the “annuitant” or “beneficiary” for a period measured by only one or two lives.
The “annuity” (payment) is fixed and never changes for the term of the contract (lives, not years). Among the versions of annuity choices are a “single life” and a “two life” agreement. A “single life” pays only one person for a lifetime, a “two life” pays person “A”, and then if person “B” survives person “A”, then pays person “B”.
Some states allow a “joint and survivor” version which allows payment to two persons simultaneously, each getting half of the amount, and at the death of the first annuitant, the survivor receives the full annuity amount (for persons who file joint tax returns and/or who live in a community property state).
Payments are not called “income”, because a portion is considered to be a partial tax-free return of the donor’s gift, which are spread “ratably” (equal payments) on a monthly, quarterly, semi-annual or annual basis (your choice) over the life expectancy of the annuitant(s).
Payments are based on rates set by the American Council on Gift Annuities and are calculated by your age at the date of the gift. The annuity is backed by the assets of the charity, not just by the gift. Applications are available at the offices of the Trust Department of the Hawaii Conference.
What is a Trust?
A Revocable Trust is a legal document that can be changed or revoked. It places cash or property to ensure that the assets will be distributed at your death according to your choosing.
Some of the advantages of a Revocable Trust are:
• While you are living, the income from trust assets belongs to you (taxes, insurance and maintenance of the property remain your responsibility-unless otherwise instructed.)
• It can be written jointly for husband/wife, allowing the survivor to receive benefits during his/her lifetime.
• Interest earned on the money placed in the Trust is paid to you on a monthly or quarterly basis.
• If you become ill or incapacitated, the charity can assume management of the trust on a temporary or permanent basis, as you choose.
• It is flexible...allowing you to make changes as circumstances dictate.
• Additions can be made at any time.
• In emergencies, assets can be withdrawn upon written request.
• Probate expense, at death, can be minimized or eliminated. Distribution to the charity takes place at your demise as the Trust specifies.
Think of a trust as a warehouse. According to Webster, a warehouse is “a building where goods are stored...or are kept in reserve until distributed at a later date to a retailer”. A trust is where you place your assets before they are released to the people or organizations you designate to eventually receive them. Anything you transfer from you to the trust becomes property of the trust. The trust then holds the property for your benefit, or for the benefit of those who are to ultimately receive it.
A trust has four components:
• A "Grantor"...the one who creates the trust
• A "Beneficiary" or "Beneficiaries"...the ones who receive the benefits of the trust. (The Grantor may also be the Beneficiary.)
• The "Assets"....the properties transferred to the trust
• A "Trustee"...the person or entity chosen to manage the assets of the trust and to distribute the property according to the terms established by the Grantor. (The Grantor can also be the Trustee, while still alive.)
Trusts can be set up while you are alive (inter-vivos) or they may be established upon your death by your Will (testamentary). Revocable trusts can be changed or revoked by the Grantor. Irrevocable trusts cannot be changed after signed
THE DANGER OF PROCRASTINATION! - Posted November 27, 2013
The tragic death of a single mother who had been dealing with health issues for several years recently happened and because she passed away without a will, her two, in-their-early 20’s-daughters, are now struggling to access the assets left behind. While their mom never married, she had a desire to raise children and through adoption, reared these two girls from toddler stage to young adulthood.
It wasn’t as if the mom hadn’t been aware of her need to have a will. She was an educated woman who held a masters degree in education. She had attended many a seminar which gave valuable information on why she should make an estate plan. She simply put it off…even in view of the escalation of her poor health issues.To complicate matters, one of her daughters has cerebral palsy and is unable to work. The other daughter is a recent graduate from high school who is caring for her disabled sister while, at the same time, is searching for work.The two girls are currently waiting for the probate court to handle their case which, because of a back-log in schedule seems not to be in the near future. They have a circumstance, in which they have no experience; they have no money to hire help so are, therefore, at the mercy of the court system and governmental agencies.
Their situation could have been avoided had their mom followed through with making an estate plan. One of our most valuable assets are our families…we have a sacred responsibility to them. This lady also had a charitable intent to help financially-disadvantaged students receive a Christian education…a good intention which will not happen because she made no preparations.Seven out of ten people die without having made a will…a sobering statistic! A person’s assets, their legacy, their “good intentions” are of no value unless they are properly documented in a will or a trust. Don’t become a seven-out-of-ten statistic! Prepare now, so that your assets are distributed according to your wish…not the court’s mandate. Contact your Planned Giving officer at Hawaii Conference for further information.