Donor would like to make a substantial gift to Charlotte Country Day, but doesn’t have sufficient assets to provide a large gift during their lifetime because of concerns regarding health costs or other potential unknown costs. A bequest allows the donor to make a substantial gift, often many times their capacity during their lifetime. Please be sure to provide appropriately for spouse and children first.
Donor owns a large policy or several policies, not all of which is needed to fund estate requirements. Make a gift of the policy and allow Country Day to choose cash value or death benefit, or designate CCDS as the beneficiary.
Charitable Remainder Trust (CRT) or Charitable Gift Annuity (CGA)
Donor owns appreciated assets. The assets are low growth, low dividend, or both. Donor does not wish to pay capital gains tax, but would like to create more current income from assets. A gift to a CRT or CGA avoids capital gains taxes and estate taxes, provides income to designated beneficiaries, and the remainder to Charlotte Country Day.
Charitable Lead Trust
Donor owns substantial assets, and would like to pass them to the next generation at low tax cost. A charitable lead trust pays income to CCDS for a period of years, then the remainder to family members. By paying to a charity, a much lower imputed value is passed to the family members, avoiding tax on the marginal difference in value. Not for the faint of heart, since the assets pass from control of both the donor and the other family members for the period of payment to the charities.
IRA or Other Qualified Plan
A great item to own during one’s life, but not ideal to try and pass to family members. Until the Charitable Rollover provision—which has been introduced in Congress every year for over a decade— passes and becomes law, the best asset in an estate to pass to CCDS is an IRA. It passes to the school tax-free. Any attempt to pass to family member causes substantial tax losses.
Real estate can be a difficult item to resolve within an estate, or by family members after it leaves the estate. A gift to CCDS avoids estate, gift and capital gains taxes, and provides an income tax deduction. If some cash is needed, then a bargain sale can be used to provide cash in part, and a gift in part.
Many donors accrue substantial assets in collections of artwork, antiques, or other personal property. Gifts of personal property can provide tax deductions while not substantially reducing the value of an estate.
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