Hospice Foundation for the Central Coast 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 for the Central Coast, 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 does a Beneficiary Designation Works?
What is The Sarah T. Hermann Society?
What kind of recognition is given for a major gift to the Hospice Foundation?

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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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  • You are not taking any assets away from your loved ones.
  • 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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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 Sarah T. Hermann 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 for the Central Coast 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. The Hospice Foundation 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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Life income agreement is a general term that includes pooled life income funds and charitable remainder trusts. These plans provide benefits for you now and, later, following the death of the final beneficiary, for Hospice Foundation for the Central Coast. Here's how these irrevocable gifts work:

  Pooled Life Income Funds

This type of planned gift is established with a gift of $5,000 or more to Hospice Foundation for the Central Coast. 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 Sarah T. Legacy Hermann 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 Sarah T. Hermann Legacy Society.

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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 Sarah T. Hermann 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.

Click here for free publications with more information about gifts of real estate.

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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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Designating a charitable organization such as Hospice Foundation for the Central Coast 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 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. Hospice Foundation will receive this money with no tax!

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Hospice Foundation for the Central Coast created The Sarah T. Hermann Society in memory of a gracious community leader whose generosity over the years helped enable the growth of hospice care to meet the needs of people living with a life-threatening illness, and their families.

The Society recognizes community members who have named Hospice Foundation for the Central Coast in their estate plans, trust, or will. Members of the Society can take pride in the knowledge that they, like Mrs. Hermann, former president of the Grover Hermann Foundation, have made a special difference in the future of their community.

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

To request a pamphlet describing this program, click here.

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  • All gifts, large and small, are listed in the Hospice Foundation's annual report.
  • 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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You may create a special fund bearing your name or a name of your choice, or you may add to an existing fund within the Hospice Foundation's Nautilus Endowment. Donors who make cash gifts or irrevocable planned gifts of $25,000 or more may name a new chamber within the fund.

For example, the Friends of Hospice Fund, created in 1994 with a gift of cash, will produce income to be used in support of patient care. The Friends organization will add to their chamber each year, thus creating a larger fund capable of supporting a steady stream for future support of end-of-life care. Other restricted funds or "chambers in the nautilus" specifically support AIDS care, community education, chaplaincy, home care, Griefbusters and other programs. 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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