Planned Giving

A planned gift can benefit your family today & Redmond - Sisters Hospice tomorrow. Please remember Redmond - Sisters Hospice in your will.

Planned Giving--Leaving a Legacy

Overview: Many people would like to make larger charitable gifts to support the organizations and institutions they care most about. Such gifts give us the means to: memorialize loved ones; provide income during our lives; and/or make sure family will receive benefits through Legacy gifts.

Private gifts and bequests help provide funding stability to Redmond-Sisters Hospice. A planned gift today can benefit Hospice for years to come.

There are many options for giving to the Redmond-Sisters Hospice. Many of these may actually enhance your financial security and/or that of loved ones. The Planned Giving Director is available to meet with you and your advisors to explore the options should you like to consider a gift.

Endowment Legacies: Endowments are often named gifts that start at $50,000 and are invested in perpetuity to produce annual income for growth of the endowment and support of specific programs and needs at Hospice. These gifts are established by the donor through outright gifts, their will, insurance or retirement policies, trusts and other planned gifts.

Wills: In making a plan for the future financial well being of yourself and/or loved ones, you may wish to begin with your will. Many people choose to provide for charitable interests by making gifts through their wills. Bequests can be made in the form of specific amounts of cash, other property, a percentage of the overall estate, or all or a portion of the residue ("what's left" after other bequests have been fulfilled). A will may be used along with, or to create, many of the plans of giving described here. Rely on your attorney and other advisors to guide you through the estate planning process.

Bequests: A bequest is a gift made through your will that directs your estate executor/executrix to make a gift from your assets to the person or institution of your choice after you die. Bequests may be used to provide gifts of money, stocks, real estate, or other property such as art or jewelry. When donors leave a bequest to Hospice, they can make a generous gift without reducing their current income or giving up ownership of the assets during their lifetime. Donors can create funds in their name or in memory of a loved one. Charitable bequests are usually deductible in full for estate tax purposes.

Charitable Remainder Trusts: Charitable remainder trusts allow you to transfer assets into a separately managed trust that will provide you and/or your beneficiaries with fixed percentage payments for life or for a set period of time. The person who establishes the trust selects the trustee as well as the charities that will receive future distributions. The donor earns a charitable deduction when the assets are transferred to a trust. Upon termination of the trust, the remaining assets are distributed to the charity and will be used for the charitable purpose specified by the donor.

Charitable Annuity Trust: With a charitable annuity trust, the donor transfers assets to the Hospice in exchange for a guaranteed, fixed annuity payment to them or one other beneficiary for life. The annual payment is a fixed sum, the amount of which is based on the size of the gift and the number and ages of the beneficiaries. In addition to the charitable deduction, a portion of the annuity payment is generally tax-deductible. Upon the death of the donor, the Hospice receives the full amount of the initial gift to use as specified by the donor.

Retirement Assets: One frequently overlooked way donors can make a charitable contribution is by using qualified retirement assets. Subject to income and estate tax, retirement plan assets are among the most taxed assets at death in larger estates. While current tax law does not allow the donor to transfer these assets directly to Hospice, the donor can name Hospice as the beneficiary on the account during his or her lifetime and, by doing so, may be able to avoid both income and estate taxes upon his or her death.

Life Insurance: A gift of a life insurance policy can be a great way to combine charitable objectives with tax advantages to donors since donors may receive an income tax deduction by naming Hospice as a partial beneficiary or owner of a life insurance policy. You can name Hospice as a designated or alternate beneficiary of a life insurance policy, a deferred annuity contract, an IRA, a defined benefit plan, a 401(k) plan, a defined profit sharing plan, or other qualified plans.

There are several ways for donors to make gifts through their life insurance. Some of the most popular options are:
  • Purchase a policy and designate Hospice as the irrevocable owner and beneficiary of the policy.
  • Designate Hospice as the new owner or beneficiary in an existing policy.
  • Add Hospice to an existing policy as a remainder or final beneficiary, in case the primary or secondary beneficiaries do not survive you.

    Real Estate: Real estate includes homes, farmland, cabins, commercial buildings, and undeveloped rural property. A current appraisal of the property is needed in order to use it as a charitable gift. Real estate may be given outright, used to fund a charitable remainder trust, or given as a life estate.

    Donating a highly appreciated real estate property that otherwise could be a tax burden, can result in tax advantages to the donor similar to those from giving appreciated securities. If you've owned the property for more than one year before giving it to the Hospice, you could earn a charitable deduction equal to the full fair market value of the property, less any outstanding mortgage. The property will also be removed from your taxable estate.

    Options exist that allow you to give your primary residence to Hospice and continue to live there or derive an income from it during your lifetime. See Life Estate Agreements below.

    Gifts of real estate may be transferred to Hospice after the Board of Directors agrees to accept and administer such gifts.

    Life Estate Agreements: Life estate agreements are contracts between the donor and Redmond-Sisters Hospice. The donor transfers the title to his or her real estate property, usually a primary residence, to the Hospice. In return, the Hospice agrees to provide the donor with use of the property throughout the donor's lifetime. Upon the death of the donor, the property becomes an asset of the Hospice. The Hospice can then sell the asset to generate funds, which will benefit the program, department, or other purpose designated by the donor. Life estate donors receive a partial charitable income tax and estate tax deduction, depending on their age.

    Tax Considerations: While most charitable gifts are made in the form of cash, important advantages can be possible when gifts are made using non-cash property that has increased in value. Gifts of Appreciated Property: When stocks, bonds, mutual funds, real estate, and other appreciated assets are sold, tax is due on any capital gain.

    One of the only ways to avoid or delay the capital gains tax is to make a charitable gift of the property. When you give appreciated property that has been held long-term, you may take a deduction based on the current value of the property rather than just its cost.

    The combined benefits of bypassing tax on the capital gain, receiving an income tax deduction, and making a charitable gift can be very gratifying.

    Increasing Your Retirement Income: Many of the plans described here can be a welcome addition to your retirement plans. If you have property that has increased in value but yields little income, using it to fund a charitable gift plan can help your assets do double duty.

    By carefully planning your gifts, you can substantially increase income from investment assets, while receiving the satisfaction of making a very meaningful gift in the process.

    Example: Tom Smith, 75, has been retired for five years. He has $100,000 worth of growth stocks, which cost $35,000 and yield two percent. He would like to receive more than the $2,000 per year in income that this asset currently yields. His tax bracket is 36 percent.

    If he sold the securities, he would owe a capital gains tax on the $65,000 increase in value. He would thus have considerably less than $100,000 left to invest after paying the tax.

    If, instead, he placed the stocks in a charitable remainder annuity trust with a payout rate of seven percent, his income from the property would more than triple to $7,000 per year. He would not incur tax on the $65,000 gain at the time of his gift, but he would receive income based on the entire $100,000. His income tax deduction would be approximately $41,000.

    Mr. Smith's federal income tax savings from the gift would be nearly $15,000. His savings would be even greater if he were taxed at higher state and federal rates.

    Federal Estate Taxes: Each year more people discover that their estates are surpassing the value at which such taxes are levied.

    Through careful planning of your charitable gifts, it can be possible to meet multiple goals. By choosing the best property to fund your gifts, their timing, and the methods used to make them, you may find you can give more while minimizing or eliminating federal estate and gift taxes and preserving or actually enhancing your financial well being.

    This information is intended to help guide you through the gift planning process. More information is available to you and/or your advisors on request.

    How to Plan: Before you make your will and/or other estate plans, be well prepared.

    • Make a list of the people you want to include in your plans--family, special friends, employees and charitable interests.
    • List the property you wish to distribute--include securities, real estate, life insurance, retirement plans, and personal possessions.
    • Consider ways to match the people with the property.
    • Finally, list any professional planners you may need to consult--for instance your attorney, banker, accountant, tax advisor, or representatives of a charitable recipient.
    New Tax-Saving Opportunity for Donors Aged 70-1/2: The Pension Protection Act of 2006 encourages financial support of charitable organizations across the United States from donors who are 70-1/2.

    Under the law, you can make a lifetime gift using funds from your IRA without undesirable tax effects. Previously you would have had to report any amount taken from your IRA as taxable income, then take a charitable deduction for the gift, but only up to 50% of your adjusted gross income. In effect, this caused some donors to pay more in income taxes than if they didn't make a gift at all.

    Fortunately, now these IRA gifts can be accomplished simply and without tax complications. Plus, you can make the gift now - while you are living and able to witness the benefits of your generosity!

    You May Contribute Funds This Way If :
    • You are age 70-1/2 or older
    • The gift is $100,000 or less each year
    • You make the gift on or before Dec. 31, 2007
    • You transfer funds directly from an IRA or Rollover IRA
    • You transfer the gift outright to one or more public charities.

    How the Law Works: Ruth, aged 80, has $450,000 in an IRA and has pledged to give us $75,000 this year. If Ruth transfers $75,000 to us from the IRA, she will avoid paying income tax on that amount. She cannot, however, claim a charitable deduction - it is a pure "wash." Ruth has found an easy way to benefit us without tax complications. If she desired, Ruth could give more than $100,000. The legislation allows a maximum $100,000 gift in both the 2006 and 2007 tax years. So Pat could give $100,000 each year. Plus, her spouse can also give $100,000 each year.

    How to Make a Gift: Contact your IRA custodian to transfer your desired gift amount to a charitable organization. It is wise to consult tax professionals if you are contemplating a gift under the new law.

    Planned Giving Calculator