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Janaka Home > Investors, Donors, Patrons
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Janaka Home > Investors, Donors, Patrons |
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Financial Vehicles for Planned Giving This section will describe some of the types of planned giving available. We hope that it may help you in thinking about your estate planning. It is always wise when making plans for your estate to consult with a tax accountant or attorney experienced in estate planning. For many members and friends of Ananda, the most practical and satisfying way to provide for Ananda is by including the Janaka Foundation in your will. A bequest made through a will allows you to retain full control of your assets, while providing the satisfaction of knowing that Ananda will eventually benefit from your generosity. A gift made through your will may be either a specific asset or amount, or a percentage of the total estate. It may also be all or part of what is left after all specific bequests have been fulfilled. At present there is no limit on amounts that can be removed from your taxable estate via charitable gifts for Federal tax purposes. It is wise to seek experienced legal advice in drawing up a will and to be sure to keep it up to date. This process is an opportunity to provide a substantial gift and estate tax savings for your heirs, as well as a gift that can help shape Ananda's future. While bequests by will can be dedicated to specific areas of interest within the work of Ananda, the most effective and useful gift is one that is unrestricted as to use. Such a gift allows the Janaka Foundation Board to earmark it for purposes that will best strengthen Ananda at that particular time and, if the occasion warrants, to permit changes of use without legal complications. The Janaka Foundation would be grateful to learn of your bequest commitment and to be able, therefore, to recognize you as a 'Janaka Foundation donor.' Charitable giving usually begins with outright gifts of cash or the transfer of an asset. If you itemize deductions on your Federal income tax return, your outright gift of cash is fully deductible. Generally, you can deduct up to 50% of your adjusted gross income. For gifts of appreciated non-cash assets you can deduct up to 30% of your adjusted gross income. If the amount of your charitable gift exceeds this limitation, you may deduct the balance of your gift over the next five years. If you have decided to make a gift to the Janaka Foundation, it could be advantageous to donate appreciated assets (stocks, bonds, mutual funds and other properties) instead of cash. This method offers two tax advantages. First, you receive an income tax deduction for the full market value of the stock on the date of the gift. In addition, most donors avoid liability for capital gains taxes otherwise due on the sale of the assets. A Charitable Gift Annuity is established when you transfer cash or assets (such as stocks, bonds, etc.) to the Janaka Foundation. In exchange you receive a fixed annual income for life. The amount of the annual income is determined by the amoun of the gift and by the age of the donor. You are also entitled to take a tax deduction on a portion of your total gift amount as well as on a portion of your annual payments. A Charitable Gift Annuity can be established through the Janaka Foundation by anyone who is 65 years of age and above and who donates a minimum of $10,000. Please contact us for more information about this popular planned giving vehicle. Life insurance has a variety of creative uses in charitable giving. Here are some of the ways it can be used to support Ananda. Donate a fully paid-up policy no longer needed for family protection. When you transfer ownership to the Janaka Foundation, you get a deduction for an amount roughly equivalent to the surrender value. Janaka may surrender the policy at once or hold it until maturity. The insurance policy is removed from your estate for tax purposes. Name the Janaka Foundation as owner and beneficiary of an ongoing policy. In this case, if the Janaka Foundation is named as an irrevocable owner and beneficiary, you may deduct each future premium as a charitable gift, as well as the amount of the approximate surrender value of the policy. Buy a policy, designating the Janaka Foundation as the owner and beneficiary. Your annual premium payments then become tax deductible (you make the payments in the form of annual gifts to Janaka). Upon your death,the Janaka Foundation receives the face value of the policy plus accumulations (if any). Or, if you wish, you may purchase a single-premium policy and deduct the full premium. Outright gifts of real estate may provide substantial tax benefits for your estate. A residence, farm, or vacation home that you have owned for a long time may have appreciated so much in value that its sale would result in a burdensome capital gains tax. The Janaka Foundation, as a tax exempt entity, would not have to pay capital gains tax when the property is sold. Giving the property to Janaka provides an immediate income tax deduction for you, while greatly assisting the work of the Ananda Ministry. It is also possible to make provisions for a life estate agreement in which you deed a residence or farm to the Janaka Foundation, continue to use it during your lifetime, and receive a charitable tax deduction in the year the gift is arranged. You would continue to take care of the property, pay the property taxes, and even receive any income it generates. Because you have made a gift of the property by deed, it will not pass through your probate estate at death when the Janaka Foundation receives the property. Individual Retirement Accounts (IRAs) and pension or profit sharing plans may be appealing sources of charitable gifts. Naming the Janaka Foundation as the beneficiary of your plan enables you to use the income for as long as you need it and the allows Ananda to benefit from your hard work and planning. Retirement plans in which you have accumulated assets will be subject to estate tax at your death as well as income tax when received by your heirs. These taxes in many cases can total more than 85% of the plan assets. Using these assets to fund charitable gifts can offer an outstanding benefit to the a non-profit foundation at a very small cost to your heirs, while eliminating significant taxes. You also can arrange for lifetime income to be paid to a family after death with the benefit to Ananda coming later. The Janaka Pooled Income Fund can offer lifetime income while providing a meaningful gift to Ananda. Your irrevocable gift of cash or assets will be "pooled" and and collectively invested to produce income that is shared by all participants in the fund. Since the fund's earnings will naturally fluctuate, payments will vary from year to year. Gifts to the Janaka Pooled Income Fund can be made at 50 years of age or older with a minimum donation of $10,000. The Janaka Pooled Income Fund is especially useful if you want to ensure that a sum of money will go to Ananda after your death, while also providing you with income during your lifetime. Through the Pooled Income Fund, you can make an immediate gift from which you (or one or two other donors whom you designate) continue to derive lifetime income. The annual income you receive is based on the shares you have in the Fund and will vary with the actual earnings of the Fund's portfolio. Contributions to the Fund are deductible for income tax purposes. If appreciated assets are used to fund the gift, you will avoid paying any capital gains taxes. A gift to the Pooled Income Fund is irrevocable. Such a gift would be removed from your probate estate and could not be returned. It is, therefore, not strictly an investment. You can make additional gifts to the Fund whenever and as often as you wish. Revocable Living Trust A Revocable Living Trust offers a way for you to manage property and income during your lifetime as well as to distribute your assets after your death. You may change or cancel this type of trust at any time. You can arrange to have current gifts to the Janaka Foundation made through the trust. Just as in a will, a bequest to the Janaka Foundation through your Revocable Living Trust may reduce estate taxes. In the event of your death, all proceeds of the trust will be distributed outside of your estate, avoiding lengthy and often expensive probate procedures. Charitable Remainder Trust A Charitable Remainder Trust allows you to make a gift today and receive annual payments for a set period of years, or for the rest of your life. When the beneficiaries of the trust die, what is left in the trust, the remainder, is given to the Janaka Foundation. Charitable Lead Trust If you are concerned about keeping your estate intact for your heirs, but do not necessarily need the income from the assets during your lifetime, you can set assets aside as a Charitable Lead Trust. This will allow the annual income to be given for charitable use for a period of years or for the lifetime of the donor. When the trust ends, the remaining principal plus any appreciation and undistributed income are distributed to the designated beneficiaries. An added advantage is that the gift to your heirs is valued at a reduced gift and estate tax cost. The discounted present value applies, no matter how much the principal appreciates during the life of the trust. There are many forms of trusts. We suggest that you seek the advice of a competent tax advisor or a lawyer for information that is specific to your needs.
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