Seasons of Your Life Gift Planner
Ages 60-70
At this stage in life, you may find yourself dealing with any of the following financial issues:
- Learning about wealth transfer techniques, including the transfer tax system.
- Shifting to income-producing assets.
- Assisting children and grandchildren.
For those who want to couple Catholic values with dollar value, certain types of gifts can provide solutions to taxing and planning problems.
Charitable Bequest
If you would like to make a substantial gift to support the Sinsinawa Dominicans but do not have the current disposable income or assets at this time, consider a charitable bequest—a gift by will. Through various types of bequests to the Sinsinawa Dominicans, you may secure an estate tax charitable deduction for the value of the gift. You may prefer to designate in your will or trust a sum of money, a percentage of your estate, a specific item, a work of art, or real estate that you wish to give to the Sisters. In addition to tax savings, you will enjoy the peace of mind of knowing that your generosity will support the Sisters’ ministries for years to come.
Gifts of IRAs/Retirement Plans
Use your retirement plan residue to make a bequest to the Sinsinawa Dominicans. Your heirs will still receive the benefit of your charitable donation as a deduction against their inherited amount, and, because the retirement account funds are going to charity, funding a charitable remainder trust with retirement plan residue rather than cash or property will also reduce your heirs’ tax bill. Consult your tax planner for complete, up-to-date information on tax benefits from donating IRAs/retirement plans.
Gifts of Life Insurance
A gift of life insurance is one way to make a major contribution to the Sinsinawa Dominicans at a relatively low cost and save on taxes as well. There are several possible plans:
- Donate an existing paid-up policy, naming the Sinsinawa Dominicans as owners and beneficiaries.
- Purchase a new policy, naming the Sinsinawa Dominicans as owners and beneficiaries.
- Name the Sinsinawa Dominicans as beneficiary of an existing policy.
- Name the Sinsinawa Dominicans as contingent beneficiaries should your primary beneficiary die before you.
Gifts of Real Estate
Contributing real estate—whether a personal residence, family farm, vacation home, condominium, cooperative apartment, business property, or speculative acreage—can be highly advantageous to you. You may have a significant income tax charitable deduction, you may completely avoid capital gains tax on appreciated long-term real estate, and your family’s estate taxes may be reduced. You may even give the property to the Sinsinawa Dominicans while retaining the right to occupy the residence or operate the farm.
For example, Mary Smith, 69 and recently widowed, has lived in her home for 25 years and has no plans to move. To get tax relief without altering her lifestyle, she gives her home to the Sinsinawa Dominicans while retaining the right to live in the home for life. At the time of the gift, the home is appraised at $250,000 and Mary is in the 35% tax bracket. This gift arrangement could provide an income tax charitable deduction of $125,349 and save Mary $43,872 in taxes over the period she reports the deduction. If Mary does decide to move, she will have several options, including renting the property or simply giving her life interest outright to the Sinsinawa Dominicans.
(These calculations are for illustration purposes only and should not be considered legal, accounting, or other professional advice. Your actual benefits may vary depending on the timing of the gift.)
Life-income Gifts
Do you want to support the Sinsinawa Dominicans but worry about having enough income for you and your loved ones? Life-income gifts such as charitable remainder trusts provide donors with income streams along with the satisfaction of supplying the Sisters with long-term resources. It’s a win-win situation for both you and the Sisters.
Charitable Remainder Trust
You create a trust, and income from the trust is paid to beneficiaries you specify. Beneficiaries receive income for life or for a specified number of years, and at the end of the trust term the assets of the trust pass to the Sinsinawa Dominicans.
For example, John and Mary Smith purchased growth stock for $20,000 ten years ago. It is now valued at $100,000, but the annual dividends are only $1,500. Now that they are both age 70, they would like to augment their retirement income. To do this, they transfer the stock to a charitable remainder unitrust with a 5 percent payout rate. In the first year, they will receive a $5,000 payment—more than triple the dividends they have been receiving. In addition, they avoid tax on their profit in the stock and also receive an income tax deduction of $42,329. In their 35 percent tax bracket, this saves them $14,815 in income taxes. At the survivor’s death, the unitrust assets will be distributed to the Sinsinawa Dominicans.
(These calculations are for illustration purposes only and should not be considered legal, accounting, or other professional advice. Your actual benefits may vary depending on the timing of the gift.)
For more information about gift planning with the Sinsinawa Dominicans, contact us.
Sister Mary Ellen Green, OP
Office of Development
585 County Road Z
Sinsinawa, WI 53824-9701
(608) 748-4411, ext. 273
Toll free (888) 887-6193
Fax (608) 748-4491
E-mail develop@sinsinawa.org