Planned Giving

Planned Giving

Planned gifts, such as bequests or charitable trusts, can be an advantageous way to donate present and future gifts to Rescue + Freedom Project while, at the same time, providing yourself with various tax advantages. You can take care of yourself and help Rescue + Freedom Project (R+FP) continue to rescue animals and fight animal cruelty. While R+FP is a new name, our EIN remains the same.

ADVANTAGES OF PLANNED GIVING

Depending on the type of planned giving arrangement, there can be advantages to planned giving for both Rescue + Freedom Project and the donor, including:

  • Reducing your tax burden
  • Creating income for your future
  • Reducing certain capital gains
  • Creating future financial assistance to your loved ones
  • Providing funding for specific Rescue + Freedom Project missions you that support
  • The satisfaction of making a significant charitable contribution to be put towards Rescue + Freedom Project’s mission

TYPES OF GIFTS

Rescue + Freedom Project has prepared the following information to assist you in understanding the many options available to you. However, this is not intended as legal advice, and we strongly recommend that you consult with legal and financial advisors in your jurisdiction to determine which forms of planned giving are most advantageous for your needs and desires.

Outright Bequest and/or Devise

One of the simplest ways to make a planned gift to Rescue + Freedom Project is through a bequest in your will or a provision in your living trust where you may indicate that R+FP is to be the recipient of a specific amount, a percentage of your estate, or a particular piece of property. To do so, consult your attorney who may advise that you execute a new will or amend an existing one by adding a codicil, with wording such as:

“I give and bequeath/devise* to Rescue + Freedom Project, a California nonprofit corporation, with federal tax ID: 55-0882647 the sum of $____, (and/or describe the securities or real estate) for its nonprofit charitable purposes.”

* In some states, a bequest is a gift of cash or securities, while a devise is a gift of interest in real estate.

Residual Bequest and/or devise

As an alternative to specifying a dollar amount, you may elect Rescue + Freedom Project to receive a percentage of your estate or the residue, which the amount left over after other bequests are made. To make such a residual bequest to Rescue + Freedom Project, you may designate in your will a percentage of the remaining value of your estate to pass to R+FP after all outright bequests/devises have been made. To do so, consult your attorney who may advise that you execute a new will or amend an existing one by adding a codicil, with wording such as:

“I give and bequeath/devise ____ percent of the residue of my estate to the Rescue + Freedom Project, a California nonprofit corporation, with federal tax ID: 55-0882647 for its nonprofit charitable purposes.”

* In some states, a bequest is a gift of cash or securities, while a devise is a gift of interest in real estate.

Contingent Bequest and/or Devise

To make a contingent bequest to Rescue + Freedom Project, you can designate in your will conditions under which a portion of your estate will pass to R+FP. To do so, consult your attorney who may advise that you execute a new will or amend an existing one by adding a codicil, with wording such as:

“If any or all of my heirs named herein under have predeceased me, I give and bequeath/devise the portion of my estate reserved for that person or persons to Rescue + Freedom Project, a California nonprofit corporation, with federal tax ID: 55-0882647 for its nonprofit charitable purposes.”

* In some states, a bequest is a gift of cash or securities, while a devise is a gift of interest in real estate.

Restricted Bequest/Devise and Endowment Funds

While unrestricted bequests and devises are most common, you may also designate your bequest/devise for a particular purpose. If you wish your bequest to establish an endowment fund, you may wish to use the following language in your will:

“I give and bequeath the sum of ____ dollars (or describe securities) to Rescue + Freedom Project, a California nonprofit corporation, with federal tax ID: 55-0882647 to establish an endowment fund, to be known as the __________, to provide unrestricted support for R+FP. In years when fund expenditures are less than fund income, the balance is to be accumulated.”

If you wish your bequest to establish an endowment fund to benefit a particular program or department at Rescue + Freedom Project, you may wish to use the following language in your will:

“I give and bequeath the sum of ____ dollars (or describe securities) to Rescue + Freedom Project, a California nonprofit corporation, with federal tax ID: 55-0882647 to establish an endowment fund, to be known as the __________, to provide support for the following purposes: (insert specific purpose, which must be consistent with R+FP’s nonprofit charitable mission). In years when fund expenditures are less than fund income, the balance is to be accumulated. If in the future, in the opinion of the directors or officers of Rescue + Freedom Project, the income cannot usefully be applied for the above purpose(s), it may be used for other purposes that will permit appropriate recognition of the intent of this gift.”

Retirement plans are among the most highly taxed assets one can own, subject to income tax and estate tax that can deplete the value significantly. By naming Rescue + Freedom Project as the beneficiary of your retirement plan, the retirement funds remaining at your death are not taxed and your heirs have no “hidden” income tax liability.

Another very efficient way to give retirement plan assets to Rescue + Freedom Project is through the IRA Charitable Rollover. Under the IRA Charitable Rollover, for eligible tax years, individuals age 70½ or over could exclude up to $100,000 from gross income for donations paid directly to a qualified charity from their IRA. Key points about qualified charitable contributions (QCDs) include:

Married individuals filing a joint return could exclude up to $100,000 donated from each spouse’s own IRA ($200,000 total).

  • The donation satisfies any IRA required minimum distributions for the year.
  • The amount excluded from gross income isn’t deductible.
  • Donations from an inherited IRA are eligible if the beneficiary is at least age 70 ½.
  • Donations from a SEP or SIMPLE IRA are not eligible.
  • Donations from a Roth IRA are also eligible.

As in all charitable gift decision-making, review with one’s advisor and attorney is encouraged.

Another effective way to donate to Rescue + Freedom Project is through a gift of life insurance, which, depending on how the donation is accomplished, can have tax advantages, as well as the benefit of generally avoiding probate, creditor’s claims and contests by heirs.

There are two basic ways to make a gift of life insurance: (1) an irrevocable gift of a new or existing policy where the donor gives up all incidents of ownership, or (2) by naming Rescue + Freedom Project as the outright or contingent beneficiary of a policy. Each approach has advantages and disadvantages and you should discuss them with your lawyer, advisor and accountant.

Irrevocable gift of an existing life insurance policy: If you own life insurance, you might consider making an irrevocable gift of the policy to Rescue + Freedom Project. If complete ownership is transferred to Rescue + Freedom Project and BFP is named as the beneficiary, the gift will generate a charitable income tax deduction.

Irrevocable gift of a new policy: You may take out a new policy and irrevocably name Rescue + Freedom Project as the owner and the beneficiary. Whether you make one single premium payment for the policy or pay premiums annually, each payment produces a charitable income tax deduction.

Naming the charity as a primary or contingent beneficiary: You may also name Rescue + Freedom Project as either the primary or contingent beneficiary of the policy. However, this option will not produce an income tax charitable deduction for the payment of future premiums on the policy, but it does provide a full estate tax charitable deduction at death.

Gifts of real estate can include homes, undeveloped land and parcels of land, condominiums, apartments, farmland, and rental property. A gift of this kind can alleviate capital gains taxes, income taxes, and brokers fees as well as management costs and responsibilities, while Rescue + Freedom Project can receive income or generate capital from your gift.

Another method to donate to Rescue + Freedom Project is through a species of charitable remainder trust. A charitable remainder trust is a trust which provides for: (1) a definite distribution, at least annually; (2) to one or more beneficiaries, at least one of which is not a charity, such as BFP; (3) for life or for a term of years; (4) with an irrevocable remainder interest to be held for the benefit of, or paid over to, charity.

There are two types of charitable remainder trusts: a (1) charitable remainder annuity trust, or a (2) charitable remainder unitrust. Whether a charitable remainder trust is a charitable remainder annuity trust or a charitable remainder unitrust depends essentially on how the specified distributions to the beneficiaries are determined. In the case of an charitable remainder annuity trust, the specified distribution must be a sum certain that is not less than five percent of the initial fair market value of all assets placed in trust. In the case of a unitrust, the specified distribution must be a fixed percentage that is not less than five percent of the net fair market value of the trust assets, valued annually.

The IRS typically issues a series of revenue ruling and revenue procedures that provide specimen (sample) trust agreements for various types of charitable remainder trusts. When a trust is drafted that contains provisions substantially similar to those provided in the appropriate sample, the IRS may recognize the trust as satisfying all the requirements of the law and and regulations. Consequently, your attorney, or whatever professional assists you in drafting your trust agreement, might not have to request a ruling from the IRS on the qualifications of your charitable remainder trust as drafted.

A charitable remainder trust has several benefits. The client can control the distribution of her/his social capital by naming the charitable remainderman of the trust. As opposed to an outright gift to charity, a charitable remainder trust allows the client grantor to make a charitable gift while retaining some benefit, either for him/herself or others, from the property transferred. Also, no capital gain taxes are due on the transfer of the assets into the charitable remainder trust. This is because when the property in the trust is sold, the trust does not have to pay any capital gain taxes. This gain, in turn, might be used to benefit income beneficiaries for several years.

The charitable remainder trust also allows for a fair amount of flexibility in selecting the timing and the pay-out of the income stream, permitting it to be distributed during the client’s lifetime or for a period of years. This payout, then, can be specifically tailored to meet each client’s individual needs.

Finally, certain income and estate tax deductions may be generated by the creation of a charitable remainder trust.

Talk to your estate planner or attorney to discuss donating to Rescue + Freedom Project through a charitable remainder trust.