Hospice Foundation Planned Giving Strategies


20 Ragsdale Drive, Suite 260 P.O. Box 1798
Monterey, CA 93942-1798 (831) 333-9023 Fax: 373-4124
E-mail: info@hffcc.org Home: www.hffcc.org


Planned giving can offer unique tax-savings and/or income producing benefits to donors of charitable organizations. By selecting a plan that best fits your particular situation, you can provide for your needs now or in the future, or for the needs of your loved ones or others you designate. At the same time, you can realize significant tax relief or income producing opportunities because your plan includes a charitable gift component.

If you are considering a gift to Hospice Foundation, we offer services at no charge to help you and your advisors choose a plan that most closely meets your needs and desires. To explore how charitable, planned giving works and its benefits to you, select from the following choices or scroll down through them. The following information is not intended to constitute tax, accounting or legal advice. Potential donors should consult with their own tax, accounting or legal advisors in connection with planned giving.

What is a Planned Gift?
What are the benefits to me in Planned Giving?
Tell me about a Bequest
What is a Life Income Agreement?
Tell me about Charitable Gift Annuities
Tell me about the Pooled Life Income Fund
Tell me about Charitable Remainder Trusts
Tell me how to make gifts of Real Estate
Tell me how a Bargain Sale works
Tell me how a Beneficiary Designation works?
What is The Helen Westland Legacy Society?
What kind of recognition is given for a major          gift to the Hospice Foundation?


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WHAT IS A PLANNED GIFT?

Gifts made as part of your overall financial or estate plan that can benefit you and your loved ones now and the Hospice Foundation later, are known as planned gifts.


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WHAT ARE THE BENEFITS IN GIFT PLANNING?

  • With certain planned giving vehicles, you are not taking any assets away from your loved ones.
  • With certain planned giving vehicles, you can still change your mind if a need for the assets arises.
  • You can provide a stream of income to loved ones, and retain the assets.
  • You can pass assets on to your loved ones or other individual(s) and reduce your taxes.
  • You can sell your business (or turn it over to other family members) and avoid a potentially heavy tax burden.
  • Through your will or trust, your assets will go where you have designated.


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PLANNED GIVING: MAKING A BEQUEST TO THE HOSPICE FOUNDATION

Bequests are made through a written and executed will, and can be designated any way the donor wishes.

Your Legacy

For many people, the bequest is the most popular method of planned giving. The bequest is made through your will, a legal document which directs how your property will be used and distributed after your lifetime. A bequest does not reduce your current income, yet it enables you to provide substantial future support for a cause that is important to you-truly a legacy to your community. A gift to the Hospice Foundation through your will has several advantages:

  • Charitable gifts are 100 percent deductible for estate tax purposes.
  • A charitable bequest may place the taxable portion of your estate in a lower tax bracket.
  • If you wish to establish an endowment fund through your will, you can request that it be named for you or anyone you wish to honor.
  • When you notify the Hospice Foundation of your bequest intention, you receive membership in the Helen Westland Legacy Society.

How to Word Your Bequest

You may direct funds to support a specific program receiving grants from the Hospice Foundation, or for the Foundation's general grant program. Either of these can be accomplished by making a new will, modifying your present will (by adding a codicil), or by including the Hospice Foundation in your revocable trust. To bequeath money or property to the Hospice Foundation, you and your lawyer may find the following language helpful:

"I hereby give, devise, and bequeath to Hospice Foundation of Monterey, California for its general purposes (……dollars) (……percent) (_____ percent of all the rest, residue, and remainder of my Estate after all other bequests have been made)."

Your own attorney should draft your will. Hospice Foundation staff will be pleased to consult in confidence with you and your legal advisor about the phrasing of any specific bequest you may have in mind.


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PLANNED GIVING: WHAT IS A LIFE INCOME AGREEMENT?

Life income agreement is a general term that includes pooled life income funds, charitable remainder trusts, and charitable gift annuities. These plans provide benefits for you now and, later, following the death of the final beneficiary, for Hospice Foundation. Here's how these irrevocable gifts work:

 Charitable Gift Annuities

In an era of uncertainty about many retirement income vehicles, at least one remains guaranteed - the income payment you can receive from a charitable gift annuity (CGA).

Hospice Foundation is excited to be able to offer you a Charitable Gift Annuity as a new way to benefit yourself and/or a loved one, as well as the ultimate recipients of end of life care through Foundation grants.

Many individuals have used gift annuities to accomplish both income and philanthropic goals. A charitable gift annuity is part investment and part gift. It is particularly attractive to a person who wants to receive income from assets that have risen sharply in value, such as stocks.

Because gift annuities may be new to you, this portion of our website will explain what a gift annuity is, how it works, and how it benefits you. We'll try to answer most of the frequently asked questions about gift annuities. If your particular question isn't answered, please email Jim Bennett, CFRE, Hospice Foundation Development Director or call him at (831) 333-9023, ext. 11.

What is a charitable gift annuity?

A charitable gift annuity, in basic terms, is a legal contract under which you, in exchange for your gift to Hospice Foundation, will receive a fixed payment for your life. Hospice Foundation uses the interest and part of the principal to make the payments to you.

How does a gift annuity work?

In return for your contribution (a gift of cash or property), and pursuant to a signed agreement, Hospice Foundation agrees to make fixed, guaranteed payments to you for the rest of your life. The amount of the annual payments will depend on the amount transferred, the ages of the beneficiary(ies), and the annuity rate schedule in effect at the time of the gift. Once the annuity is established, the payments remain fixed, regardless of the changes in the economy. This makes the gift annuity especially attractive to older donors (60 and above) who like the security of fixed, guaranteed payments.

What can a charitable gift annuity provide?

It can provide you supplemental income payments for your lifetime (and the lifetime of your spouse or another designee); significant tax breaks at the time of the gift and for the remainder of your life expectancy; and support for Hospice Foundation for generations to come.

Who may receive payments from the annuity?

Payments may be made to up to two beneficiaries (also called annuitants). While typically the donor(s) name themselves, an annuity can also be established to benefit others, such as a parent or sibling.

What determines the amount of the annuity payment?

The annuity payments will be determined at the time the annuity is entered into, and will be based on the age/s of the annuitant/s at that time.

How does a gift annuity benefit the Hospice Foundation?

At the end of the annuitant's life (or, with a two-life annuity, the end of both lives) the remainder of the principal you have transferred will be used by the foundation to support quality, compassionate end-of-life care programs and services in Monterey and San Benito counties.

Can a charitable gift annuity be set up for more than one person?

Yes. Gift annuities are frequently arranged to provide payments for two persons. Under such arrangements, payments are made to both annuitants for their joint lifetime. Upon the death of the first annuitant, the payments are continued for the lifetime of the survivor. You may name anyone you want as an annuitant.

Are there tax advantages with a gift annuity?

Yes. The donor receives a charitable deduction immediately. In addition, the annuity payments you receive from Hospice Foundation are partially tax-free, representing a return on the principal contributed. Note: When a donor lives beyond his or her actuarial life expectancy, the entire annuity payment will be taxed as ordinary income.

Can I contribute securities for a gift annuity?

Yes. In fact, contributing highly appreciated securities which you have held for more than 12 months offers additional tax savings. The donor pays no tax on the capital gain attributable to the charitable gift portion of the contribution. If the donor is an annuitant, the gain attributable to the annuity payments does not need to be recognized in the year of the gift but can be reported ratably over life expectancy.

Is it possible to make an immediate contribution for a charitable gift annuity but delay actual receipt of the annuity payments until later?

Yes. The deferred payment gift annuity plan is designed to appeal to the younger donor, under 60, who has a high current income, can benefit from a current tax deduction, and is interested in augmenting retirement income on a tax-favored basis. It involves the current transfer of cash or marketable securities in exchange for an annuity starting at a future date - usually at the donor's retirement.

The donor realizes an immediate income tax charitable deduction for the gift portion.

Can a deferred gift annuity supplement a qualified retirement plan or an IRA?

Deferred payment gift annuities are an excellent means of supplementing retirement income.

GIFT ANNUITY TABLE

The table below shows the approximate payout rate of a gift annuity based on the age of the participant.

One Life. Approximate Payout Rate
Effective July 1, 2003

Age Payout Rate
60 5.7%
65 6.0%
70 6.5%
72 6.7%
74 6.9%
76 7.2%
78 7.6%
80 8.0%
82 8.5%
84 9.2%
86 9.9%
88 10.6%
90+ 11.3%



A Two Life - Joint and Survivor Rate - is available by contacting the Development Department office at (831) 333-9023, ext. 11 or by emailing Jim Bennett, Development Director.

Gift annuities are a popular gift vehicle, allowing people the opportunity to simultaneously make a gift while, at the same time, provide for their future financial security. We would be pleased to answer any other questions you have, send you a personal financial illustration, or schedule a meeting with you. There is no charge and you are under no obligation. Please call us at 333-9023, ext 11 or email Jim Bennett.

(Please note. You should consult your attorney about the applicability of the principles described here to your own situation. We would be glad to assist you and your advisor in obtaining the exact deduction for a gift you may be considering.)

  Pooled Life Income Funds

This type of planned gift is established with a gift of $5,000 or more to Hospice Foundation. Your gift is invested in a common fund with other donors. You may name two individuals to receive a share of the income earned by the fund. The trust department of Wells Fargo Bank manages this fund. The income will fluctuate with changes in interest rates.

After the last beneficiary has died, your gift will be used by the Hospice Foundation for the purpose you have specified.

Advantages of Pooled Life Income Funds

  • An income for life for those you name (you can include yourself).
  • With appreciated securities, you avoid capital gains tax.
  • An immediate income tax charitable deduction
  • Possible reduction in your estate tax
  • Membership in the Helen Westland Legacy Society.
  • If you make your gift with low-yielding securities, you may actually increase your current income.

  Charitable Remainder Trusts

Income from your gift is paid to those beneficiaries whom you select for a lifetime and/or a term of years. At the end of the trust's term, the property remaining in the trust will be used by the Hospice Foundation for the purpose you have specified. There are two types of charitable remainder trusts, both of which are irrevocable:

  • Unitrust: income fluctuates annually with the fair market value of the trust.
  • Annuity trust: income payments are fixed and determined when the gift is made, which is attractive to individuals who wish to avoid risk.

Advantages of CRTs

  • Income for life and/or a term of years.
  • You receive an immediate income tax charitable deduction.
  • If you make your gift with low-yielding securities, you may actually increase your current income.
  • If you make your gift with appreciated securities, you may avoid capital gains tax.
  • You may reduce your estate tax.
  • You have the satisfaction of supporting a cause important to you.
  • Membership in the Helen Westland Legacy Society.


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PLANNED GIVING: GIFTS OF REAL ESTATE

Following are several ways in which you can make a gift of real estate:
  • Outright gift
  • Gift with retained life use. Give your residence, vacation home, or farm to the Hospice Foundation and continue to use it during your lifetime and your spouse's lifetime.
  • Life income agreement. Give your property to a trust that sells the property and invests the proceeds, paying you an income for life.
  • Gift by bequest.

Following are some reasons you may want to consider a gift of real estate:

  • You would like to make a gift to the Hospice Foundation while retaining your cash and liquid assets.
  • You are discouraged from selling appreciated property because of substantial capital gain tax liability.
  • You own a rental or commercial property that has become a management problem or is not earning enough.
  • You are having difficulties locating a buyer for your property.
  • You are considering moving to a small home or retirement complex.
  • You would like to receive lifelong income from your property.
  • You would like the Hospice Foundation to benefit from the sale of your property, after you no longer have a need for it, and receive a tax deduction now.

Using a real estate gift to fund a life income agreement

Mrs. A. wants to make a substantial gift to the Hospice Foundation but her limited annual income prevents her from doing so. She has a valuable building lot purchased 35 years ago. The threat of a large capital gains tax has kept her from selling the property and reinvesting the proceeds. By using her lot, valued at $200,000, to fund a 6 percent life income trust, Mrs. A. makes a gift to the Hospice Foundation and increases her annual income at the same time. Her benefits include,

  • Additional income for life.
  • An income tax charitable deduction
  • Avoidance of capital gain tax on the property when it is sold
  • Reduction of future estate taxes
  • Elimination of management concerns and property taxes
  • An invitation to join the Helen Westland Legacy Society

Living in Your Home and Receiving An Income

In certain situations, the Hospice Foundation might be willing to provide you with an income in exchange for the remainder interest in your home or ranch. This is done on a case-by-case basis, covering the lives of two individuals 75 years of age or older. If you would like more information on this topic, please e-mail us at info@hffcc.org us or call us at (831) 333-9023.


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PLANNED GIVING: BARGAIN SALE

It may be possible to offset capital gains taxes on the sale of an appreciated asset such as real estate or securities when you donate part of the asset to a charitable entity and sell the other part in a "Bargain Sale." Suppose you want to raise cash to accomplish a short term objective, such as paying the entrance fees to a life care residential community. In a Bargain Sale arrangement, you may be able to achieve a tax deduction just large enough to offset the tax due on the cash received.


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PLANNED GIVING: BENEFICIARY DESIGNATION

Designating a charitable organization such as Hospice Foundation in your living trust or a plan which permit beneficiary designations such as an insurance policy, IRA, Keogh Plan, 401-K or other qualified retirement plan, can reduce estate taxes significantly and still benefit your loved ones.

Advantages of Beneficiary Designations

  • They are revocable which means that you can change your mind at any time.
  • They are easy to set up and change. Changes in revocable trusts can be done by a simple amendment. There is no need to change the whole trust.
  • In the case of retirement plan balances or an insurance policy, designating the Hospice Foundation as a beneficiary can be achieved by contacting the insurance company or plan administrator and submitting a change of beneficiary form.
  • The cost of the gift may be reduced substantially. There may be no estate tax on the gift. In the case of gifts of qualified retirement plan balances, income taxes may also be reduced or avoided. This could result in a gift that costs as little as 25 percent of the amount given. The Hospice Foundation will receive this money with no tax!


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THE HELEN WESTLAND LEGACY SOCIETY

The Helen Westland Legacy Society is named in honor of a dear friend of Hospice Foundation who embodies generosity, kindness and commitment.

Since the founding of the first hospice program in Monterey County in 1977, Mrs. Westland has been steadfast in her advocacy and support of hospice care in our community. Over the years, her leadership in fundraising has helped to make hospice care possible for hundreds of Central Coast families.

The Society recognizes individuals, like Mrs. Westland, who have named Hospice Foundation in their estate plans through either a will, a charitable gift annuity, or other avenues available, or as an endowment.

Members of the Helen Westland Legacy Society can take pride in the knowledge that they are helping to ensure the availability of quality, compassionate end-of-life care into the future.

Members of the Society are also invited each year to the Foundation's annual meeting and Benefactor Council Reception. Legacy Society members are also listed in the Foundation's Annual Report.

To request a pamphlet describing this program, click here.


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PUBLIC RECOGNITION FOR A MAJOR GIFT

  • All gifts, large and small, are listed either in the Hospice Foundation's annual report or spring newsletter.
  • Any gift or pledge of $25,000 or more is recognized as part of the Hospice Foundation's Nautilus Endowment Fund.
  • For gifts of $1,000 or more, donors are given the opportunity to have a ceramic tile beautifully inscribed with the name of your family, a loved one or a friend. Hundreds of these Tiles of Life line the hallways of Hospice House inpatient care center in Monterey, California.


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NAUTILUS ENDOWMENT FUND
 
   An organization exists because of a vision. Those who have made a planned gift have led the way through their estate planning and have set an example for those who follow.

We invite you to join us through your charitable planned giving. How It Works:
  • You decide, when making your planned gift, to make it permanent.
  • Your gift is invested, in perpetuity, with the investment income being used to support hospice and other end-of-life care services, to include care for the caregiver and bereavement programs.

  • Your gift can be for general purposes or can be restricted in support of one of the following areas:
  • Care for the Caregiver. Supports services to help caregivers cope with their responsibilities and to take time to refresh their spirit.

  • Bereavement. To support programs for grieving families.

  • Griefbusters. To support a program for children grieving the loss of a family member or a friend.

  • Hospice House. To support care for pain and symptom management and respite care in a 28-bed in-patient facility, located in Monterey.

  • Friendship Fund. To support care for those dying from HIV/AIDS.

  • Patient Sponsored Care. To provide funds for those who do not have the resources to cover hospice and other end-of-life care and services.

  • Pediatric Hospice Care. To assist children with a life-threatening disease or at the end-of-life.

  • Foundation Fund. To support the Hospice Foundationís grants program for end-of-life care.
To request a pamphlet which describes this program, please click here, or call us for more information at 831-333-9023.


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