From a donor's perspective, planned giving is attractive for many reasons. It may allow you to make larger gifts than you otherwise could out of your current assets. Depending on how a planned gift is set up, it may also let you receive a stream of income for life, earn higher investment yield, or reduce your capital gains or estate taxes. Planned gifts often appeal to people who want to benefit a charitable organization but aren’t certain how much of their assets they’ll need for themselves during their lifetimes.

Planned gifts can be used to benefit a specific nonprofit organization, to establish a fund at a community foundation, to create a supporting organization, or to start a private foundation.

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PLANNED GIVING OPTIONS
The most common types of planned giving vehicles are gift annuities, charitable remainder trusts, charitable lead trusts, charitable bequests and beneficiary designations:

Gift Annuities
A charitable gift annuity provides you with lifetime income. To establish a gift annuity, you contribute funds or assets to a nonprofit organization, and that nonprofit in turn makes fixed annuity payments to you from its general assets for the rest of your life. You receive an immediate income tax deduction for a portion of the gift, and a portion of each annuity payment is treated as a tax-free return of the investment. The portion of the gift not used for payments benefits the nonprofit organization.

Charitable Remainder Trusts
A charitable remainder trust allows you and/or other designated beneficiaries to receive income from a trust for your lifetime(s), or for a period of years not to exceed 20. At the end of that time, the balance of the trust is transferred to a charity that you have selected. You can take a charitable deduction for a portion of the gift you make to the trust in the year the trust is formed. (In some cases, additional funds may be added in later years.) The two most common types of charitable remainder trusts are annuity trusts and unitrusts, which differ in how the income you receive from the trust is calculated and distributed.

Charitable Lead Trusts
A charitable lead trust allows you to designate a charity to receive a regular, fixed amount from a trust for a specified time period or the lifetime of a designated person. At the end of that time period, the remainder of the trust passes to your designated heirs or other non-charitable beneficiaries.

Charitable Bequests
The term "charitable bequest" is used to describe anything you give or leave to charity from your estate through a will or a revocable inter vivos ("living") trust. An "estate" is any property, money or personal belongings that you may have at the time of your death. Most people leave an estate when they die, even though they may not have a great deal of wealth. Even an individual with a small estate can arrange to leave a charitable bequest.

You can arrange to bequeath a gift from your estate in several different ways. You can set aside a specific dollar amount, leave a percentage of your estate, or leave any assets left over after your family has been provided for. Some people use a bequest to give a charity something they own, such as a car, home, art or jewelry. Others leave a paid life insurance policy or other financial investments, such as stocks, bonds or CDs. These gifts may provide tax savings (see What to Give). Consult a professional advisor for details.

Beneficiary Designation
By designating a charity as the beneficiary of your life insurance or retirement assets, you can enjoy some flexibility in your charitable giving as well as certain tax advantages. The designated charity will receive the specified assets upon your death, and you have the option of changing the eventual recipient throughout your life. For more information, go to the life insurance or retirement assets sections under What to Give.

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PLANNED GIVING EXAMPLES
For some real-life examples of planned giving in action, see the Giving Stories of people who have made planned gifts:

• Mike Meunier
• Myrna Rose Strand

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In addition to the statewide Leave A Legacy program, there are Leave A Legacy programs working to increase charitable bequest giving in many communities in Minnesota, including:

• Leave A Legacy Central Minnesota (serving the St. Cloud area)
• Leave A Legacy Greater Mankato
• Leave A Legacy Lake Superior Region (serving Duluth, Superior, Wis., and the Upper Peninsula)
• Leave A Legacy Red River Valley (serving Fargo/Moorhead)
• Leave A Legacy Red Wing
• Leave A Legacy Rochester Area
• Leave A Legacy Winona

For more information on any of these programs, call 888.999.6450 or 651.917.6252.