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Bequests
A gift made through one’s will is perhaps the most popular form of a planned gift. Such gifts may enable a donor to make a significant contribution to Charlotte Latin that was not possible during his or her lifetime. A bequest to the School can be included in the body of a will or in an addition (a codicil). As with lifetime gifts, a bequest may be unrestricted, providing Latin with the flexibility to meet its needs as they arise, or a specific gift may be designated for the use of your bequest. Testamentary gifts to Charlotte Latin are typically deductible for estate tax purposes and may be made in several ways.
Specific Bequest:
You may stipulate that a certain percentage of your estate, or a certain dollar amount, or particular securities, or other assets be given to Charlotte Latin.
Residuary Bequest:
You may state that a portion of your estate be given to Charlotte Latin after specific amounts are distributed to other beneficiaries.
Testamentary Charitable Trust:
You may establish a unitrust or annuity trust for the benefit of specific beneficiaries through your will. The trust principal is transferred to Latin only after the death of the last trust beneficiary.
Gifts of Life Insurance
Life insurance may permit the donor to make a substantial gift for a relatively modest annual outlay. A gift of a fully paid life insurance policy may also be a handsome gift without any immediate out-of-pocket cost. Naming Charlotte Latin as owner and beneficiary of a paid-up life insurance policy entitles you to a deduction equal to your cost basis in the policy, or its replacement cost, whichever is less. Naming Charlotte Latin as owner and beneficiary of a policy that is not paid-up provides a tax deduction for the premiums paid.
Gifts with Income Retained for Life
Gifts that provide income are excellent vehicles for retirement planning. These gifts allow you to make a significant contribution to Charlotte Latin and receive a number of benefits:
• income payments for your life or the life of your spouse
• the probable elimination of capital gains tax on appreciated property
• an income tax deduction
• potential investment diversification
• professional management
• the probable reduction of estate taxes and probate costs
• the satisfaction of directing the purpose of your gift
• the fulfillment of supporting Charlotte Latin during your lifetime
Gift Annuities
The gift annuity, which offers fixed payments for life, is the simplest of life income plans, and it is a contract between you and Charlotte Latin School. Part of these payments is tax-free, part is ordinary income-and if the annuity is funded with appreciated securities-part of these payments is treated as capital gains income. Your income tax deduction is based on the amount of your gift, the ages of the beneficiaries, and the income received. You may increase your after-tax income, particularly if appreciated stocks are used to fund the gift annuity. A gift annuity may be established with a minimum contribution of $25,000.
Annuity Trust:
An annuity trust is separately invested and provides fixed income. An annuity trust is valued when the trust is established and at least five percent of this amount is distributed quarterly to you or to another beneficiary. You may establish an annuity trust for a minimum of $100,000.
Your income tax deduction is based on the amount of the gift, the ages of the beneficiaries, and the percentage of the trust assets received as income. Generally, the more income you receive, the lower your tax deduction.
Unitrusts:
A unitrust also is separately invested and provides income that may vary from year to year. The unitrust is valued the first business day of every year, and a percentage of the trust is distributed quarterly to you or another beneficiary. Unitrusts may be established for $100,000, and additional contributions may be made to a unitrust with a minimum of $10,000. As with annuity trusts, your income tax deduction is based on the amount of the gift, the ages of the beneficiaries, and the percentage of the trust received as income.
Gifts That Keep Property in the Family
Another vehicle that keeps property in the family is a lead trust, whereby you make a gift of income to Charlotte Latin for a term of years. After the term is over, the principal may be passed on to your children or your estate.
Lead trusts can provide a means of directing assets to children or other heirs in a cost-effective way. Lead trusts do have a number of income and gift tax consequences, however, which should be considered before making a gift.
Capital Society
Charlotte Latin has established an avenue for planned giving. The “Capital Society” recognition is designed for those who have supported the School with planned gifts. Planned gifts greatly enhance our endowment and assure a strong financial future for our School. Members of The Capital Society help to ensure excellence in the education of our students for generations to come.
Pension Protection Act of 2006
The recently enacted Pension Protection Act of 2006 will provide significant tax benefits to donors. This legislation permits donors to transfer assets from their individual retirement accounts (IRA’s) to Charlotte Latin without realizing the distribution into their taxable income. This may help you if:
- You make charitable gifts but do not itemize on your tax return
- You have to take distributions from your IRA but don’t need some or all of the income
- Your charitable gifts now or in recent years equals 50 percent of your adjusted gross income
To qualify:
- Donors must be 70.5 years old or older at the time of their contribution.
- Distribution must be made directly to the charity.
- The gift maximum per donor is $100,000 per year in 2006 and 2007.
Distributions made to Charlotte Latin will apply toward satisfying your minimum distribution requirement!
PLEASE NOTE: This information is provided as an educational service and is not intended as legal or tax advice. Consult your own legal or tax advisor before making any decision based on this information.
Thank you for your inquiry. We would be pleased to discuss your interest in making a Planned Giving contribution. You may contact Harry Creemers (hcreemers@charlottelatin.org) or Lucy Anderson (landerson@charlottelatin.org) in the Development Office, or Sally Gray Smith (ssmith@charlottelatin.org) in the Alumni Office, either by email or at 704-846-1100.
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