How Do I Create a Jewish Legacy?
There are many different ways to leave your own legacy.
Some can even be completed without the help of an advisor, although
you are always encouraged to consult a professional to insure that
your charitable plans are consistent with your plans for other
loved ones.
Everyone has a unique family and financial
situation. Your legacy gift of any size can be designed to match your
personal circumstances. To navigate to a specific area of interest,
select a topic below and click for more information:
Charitable Bequests
You can create a permanent legacy by
leaving a bequest of a specific amount of cash, a percentage of your
estate or the remainder of your estate. There's no limit on the amount
you may set aside from your estate--you can make a gift as large or
small as you'd like. (Some agencies may have minimum requirements for
establishing an endowment.)
You may choose to make a gift of cash, securities
or other property--and your estate will receive a tax deduction
in the amount of your charitable bequest. A charitable bequest
allows you to retain use and control over your assets during your
lifetime.
A bequest is a legacy
gift, distributed from the donorâs estate after the end of his or
her life. If not designated, it can be spent in the year that it
matures. An endowment is a fund that is held in perpetuity, distributing a specified percentage annually to the designated purpose.
An outright gift using appreciated assets or cash
When you create a legacy with a current gift of cash or other property,
your fund may be used to pay an annual gift to the charity of your
choice. If you donate appreciated securities held for more than
one year, you can avoid capital gains taxes and receive a tax receipt
for the full value of your gift in the current year.
An IRA or pension plan
If you have accumulated substantial amounts in your retirement account
and you are in the highest brackets for paying income and estate
taxes, those taxes can exceed 70% of the amount in the plan.
These are not ideal assets to bequeath to your heirs. Naming one
or more
charities as the after-death beneficiaries of your IRA pension
fund (by designating specific amounts or percentages) can save
these taxes while supporting the causes closest to your heart.
A life insurance policy
Life insurance is an advantageous and inexpensive way to create a legacy.
When you purchase a new policy naming a charity as owner and
beneficiary, you will receive a tax receipt for the full value
of the annual
premium payments.
You could also transfer an existing policy and name
the charity as owner. At the time of transfer you are entitled
to a current deduction
equal to the net cash value of the policy. All future premium
payments,
when paid, would be a current tax deduction. The reasonable
cost and tax benefit make life insurance a particularly appealing
approach
for some donors.
A charitable gift annuity
A charitable gift annuity is a contract between you and the Jewish
Endowment Foundation that provides you and/or another person with an
income for life. In exchange for your irrevocable transfer of cash or
marketable securities, you or the beneficiary will be paid a fixed sum
each year for life. At the expiration of benefits, you have left a
permanent legacy as a link to our Jewish traditions of tzedakah and
klal Yisrael.
What are the benefits to you?
- Provides a fixed annual income stream
- Offers a tax deduction for the gift portion
- Can be used to establish an unrestricted gift or a designated gift
The assets can be used after your lifetime by the
charity you designate. A charitable gift annuity is a simple planned
giving instrument.
A charitable remainder trust
A charitable remainder trust is a creative way to establish a
lasting legacy in your name and receive income from the trust for
life or for a specified number of years. Upon expiration of that
term, the remainder of the trust goes towards the philanthropic
purpose you established at its creation. Your charitable remainder
trust can be designed as either an Annuity Trust, with a fixed
annual payment to you, or as a Unitrust, in which case you are
paid a percentage of the value of the assets.
What are the benefits to you?
- You, your spouse, or someone you designate receives an annual income
- You receive an immediate tax deduction at the time the trust is created
- You incur no immediate capital gains tax on the transfer of appreciated assets
- You save estate taxes when these assets are removed from your taxable estate
- You achieve your long-term charitable objectives through the creation of a permanent legacy
Charitable Remainder Annuity Trust
A Charitable Remainder Annuity Trust provides a way to avoid
fluctuations in interest rates and ensures that you or someone
you designate receives a fixed income. You may make a gift of cash,
appreciated securities or property to set up the trust either during
your lifetime or through your will.
Charitable Remainder Unitrusts
A Charitable Remainder Unitrust provides an income for life
that can grow as the funds invested in the trust grow. This trust
agreement fixes a unitrust rate, and donors or their designated
beneficiaries receive regular payments of income for life or joint
lives, or for a period of time.
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