The most direct methods of giving are by check, credit card, or multi-year pledge with designated payments to be made by those means. In addition, however, non-cash assets can be directly gifted to NECCA.
Appreciated capital assets including stocks, bonds and securities worth more than the original purchase price can be contributed, leaving the donor free of tax liability on the capital gains which would be incurred if such assets were sold on the open market.
Certain limitations do apply, and donors are encouraged to consult their advisors concerning such gifts. Typical such outright gift assets include:
• publicly-traded securities
• privately-held securities
• real estate
• personal property
• life insurance contract
NECCA can be included in a donor’s estate plan in one of three ways:
• A general or specific bequest provides a specific item, such as stock, real estate, cash, etc. upon the donor’s death.
• A residuary bequest gives a percentage, or the residue of the estate after its financial obligations have been satisfied.
• A contingency bequest offers NECCA the ability to inherit an estate, or part of an estate, in the event the donor’s named beneficiaries predecease him/her.
If the donor has a will in place, it may be amended with any of the above bequest provisions. Each is revocable. Obviously, the first option provides NECCA more certainty for documentation of what it may receive and, therefore, a greater opportunity to recognize the donor’s intention during his/her lifetime.
Retained Interest Gifts
These gifts have two distinct parts; a charitable interest and a non-charitable interest. The donor receives a tax deduction (income, gift or estate) equal to the charitable interest. The most popular retained interest gifts are:
Charitable Lead Trusts: This is an arrangement in which assets are placed in a trust and the income earned by the assets is given to NECCA for a number of years. The asset is then passed back to the donor or to the donor’s beneficiaries. A charitable lead trust offers a number of tax advantages and can be most useful in gift and estate tax planning for donors in high tax brackets. The gift allows for a one-me, limited income tax deduction in the year of transfer.
Charitable Remainder Trusts: Through such a trust, the donor gives an asset to NECCA, receives a current-year tax deduction and retains income from the asset. Often, income to the donor from such trusts is deferred for maximum retirement benefit. The remaining principal transfers to NECCA or another entity at the donor’s death. The most popular remainder trusts are the:
• charitable remainder unitrusts
• charitable remainder annuity trusts
• testamentary trusts
The above trusts may be funded with cash or un-mortgaged real estate. Their payout periods must not exceed 20 years.
Life Estate Contracts: This is an arrangement that enables a donor to contribute a residence or farm to NECCA. The donor receives an income tax deduction in the year the gift is made, based on the donor’s age and the fair market value of the property. The donor also receives the right to continue residing on the property and/or to collect income from the property. This arrangement provides the same estate-tax benefits as a similar gift by will and also saves probate costs.
For additional information about NECCA, the Capital Campaign, and giving opportunities, please contact: