Planned Giving FAQ's

What is planned giving, and why is it so popular?
Planned gifts include trusts and bequests. When you contribute to a trust or gift annuity, you and/or your beneficiaries will receive payments for life or for a pre-specified term of years. This is an attractive option for donors who are looking for ways to provide an annual income to someone over the age of 55, while still making a substantial gift to The Bosco-Milligan Foundation. Bequests allow donors to help The Bosco-Milligan Foundation in the long term, while still retaining the assets during their lifetimes. All types of planned gifts provide considerable tax advantages.
 

What sort of gift plans also return income to me?
You have the option of making a gift that returns income to you, your spouse, or other individuals, such as a charitable remainder unitrust or charitable annuity trust. When you make a planned gift to The Bosco-Milligan Foundation of a charitable annuity or trust, you and/or your beneficiaries will receive payments for life (or for a pre-specified term of years). This helps you provide for your family during retirement, and can be a very attractive option for donors who are looking for ways to guarantee a yearly income for someone over the age of 55—a loved one or themselves—while still benefiting The Bosco-Milligan Foundation. Upon the death of the last surviving beneficiary, remaining funds are transferred to The Bosco-Milligan Foundation and are used for the purposes specified by the donor.

What tax deduction will I receive for my gift?
Your tax benefits will depend on several factors: the type of gift, the time at which it is made, whether it is outright or deferred or has any income payments. In general, though, here are some guidelines:
Outright gifts to The Bosco-Milligan Foundation generate a full income-tax charitable deduction. Outright gifts of appreciated securities are deductible at fair market value, with no recognition of capital gains -- a great tax benefit! Gifts of personal property, like art, books and collectibles, are fully deductible so long as they are relevant to our mission. Bequests do not generate a lifetime income tax deduction. They are exempt from estate tax. Similarly, life insurance distributions to The Bosco-Milligan Foundation are not income-tax deductible, but are exempt from estate tax. If you have made us the irrevocable owner and beneficiary of a policy during your lifetime, you may deduct annual gifts that offset premium payments.
The charitable deduction for a gift that returns income to you, such as a charitable remainder trust, is the fair market value of the gift asset minus the present value of the income interest you retain.

Can I deduct the premium payments I make to my life insurance policy if I name The Bosco-Milligan Foundation as beneficiary?
No. The IRS would not consider that a "completed gift" – they'd say that, as the owner of the policy, you could change the beneficiary designation to a friend or family member. We must be made the irrevocable owner of the policy for gifts offsetting premium payments to be deductible.
 
Why are transferring gifts of IRA assets to charity advantageous?
Qualified retirement plans allow individuals to defer paying taxes on a portion of their income until the assets are withdrawn during retirement years. However, after a person's death, these accounts are often exposed to income and estate taxes, at a combined rate that could rise to 75% or even higher on large taxable estates. The tax will be paid at some point—by your estate and your heirs. By making a bequest of these retirement assets to charity you receive double benefits. Your estate and heirs will not be taxed on the portion that goes to charity and you will support The Bosco-Milligan Foundation.

What are the tax advantages of life income gifts and bequests?
Gifts to The Bosco-Milligan Foundation, as to other charitable organizations, are not subject to gift or estate taxes. For example, a $10,000 bequest to a charity results in the charity receiving the full $10,000, free of tax. Since estate tax rates are up to 55 percent, that same gift made to an individual (other than a spouse) may result in $5,500 going to the IRS and only $4,500 to the individual. In the case of life income gifts, a tax deduction for the present value of the "remainder interest" in the donated assets is available. More important, however, is the fact that the sale of appreciated assets used to fund a life income arrangement does not give rise to capital gains taxes on the sale.  

Will I need a tax advisor to help me set up a planned gift?
It is recommended that you involve a professional advisor at some point in the process.

Can I direct how my gift will be used? How can I be sure it will be used as I intend?
Just as with any other kind of gift to The Bosco-Milligan Foundation, you may designate a particular purpose for your bequest or life income gift. The Bosco-Milligan Foundation carefully monitors the stated purposes of all gift funds to ensure that the donor's funds are being used only for the purposes intended.  

How can a planned gift help me accomplish more than an outright gift made during my lifetime?
You may have funds available in a retirement account, real property, or other assets you have accumulated over time. These assets may not be available for an outright gift. They could be designated through a planned gift, which gives you the opportunity to make a larger gift in the future. Planned gifts often achieve more estate and tax planning objectives then outright gifts.

What assets can I use to make a gift to The Bosco-Milligan Foundation?
Generally speaking, during your lifetime you can make an outright gift of cash, securities or other property (e.g., real estate, personal property).
Through your will or with a distribution from a retirement plan or life insurance policy, your gift can be designated to The Bosco-Milligan Foundation in accordance with your wishes. 

What are the best assets to use for a planned gift?
Securities, real property, insurance policies, retirement plans, and many other assets can be used to fund a gift to The Bosco-Milligan Foundation.  

I would like to remember The Bosco-Milligan Foundation in my will. What language should I use to include The Bosco-Milligan Foundation in my will/trust?
Suggested bequest language for you and your legal advisor is provided.

Does The Bosco-Milligan Foundation have to know of my planned gift intentions?
We recognize that you might wish to keep your bequest intentions confidential. If you are willing to inform us, however, knowledge of your intentions help The Bosco-Milligan Foundation in its financial planning.

 

Planned Giving Glossary of Terms

 

Bequest: a testamentary gift (or gift received after death) generally received through a donor’s will or other estate-planning document such as a living trust.

Charitable Annuity Trust: provides a fixed income based on a percentage of the initial value of the trust assets. By law the annuity amount must be at least 5 percent. This trust is most often used when the donor’s primary goal is to receive a fixed income and long term inflation is not a concern.

Charitable Lead Trust: allows donor to give a fixed annual income to charity for either a fixed term of years or the life of one or more individuals. At the end of the measuring term, the trust is dissolved and the remaining assets (or remainder interest) are distributed back to donor or to individuals specified in the trust.

Charitable Remainder Trust: A flexible way to give and receive an income. Assets are placed in an irrevocable trust that is managed by a trustee (for example a bank). Assets are invested by the trustee and can grow tax-free. Trust pays an income for life or for a set term of years to the named beneficiaries. When the last income beneficiary dies, or the trust term ends, the trust dissolves and the remaining assets (charitable remainder) are given to the charity for the purposes designated by donor.

Charitable Remainder Unitrust: provides a variable income that is a percentage (by law, a minimum of 5 percent) of the trust assets. Assets are valued annually. Income payments increase or decrease with the changing value of the trust. The trust provides a potential hedge against inflation as income payments may rise over time. Also, the trust can be structured to defer income and maximize growth (for retirement planning as an example) or to handle specific types of assets.

Endowment: A gift that is intended to be kept permanently and invested to generate income for charity.

Living trust: A written agreement to govern the distribution of assets at death. Trust is established by donor for their lifetime and is usually revocable.

Outright gift: contribution of cash or property in which donor retains no interest and can be used right away by charity.

Pooled income fund: A pooled income fund is a trust, operated by a charitable organization, that combines the contributions of many donors for investment purposes. When donors make gifts to the pooled income fund, units are assigned to them or their named beneficiaries. The net income from the fund is paid to each beneficiary on the basis of the number of units assigned. This makes it ideal for smaller contributions.

Professional advisors: are estate-planning attorneys, financial planners, trust officers, certified public accountants, stockbrokers and insurance agents who can be invaluable guides in helping you plan and execute your charitable giving.

Retained life estate: this gift occurs when a donor transfers title of a personal residence or farm to charity and retains the life estate interest while charity retains the remainder interest. Life estate interest is the donor’s right to use the property for a term of years or their lifetime and/or another person. Remainder interest is charity’s right of ownership to the property after life estate has expired.

Retirement assets: are assets such as a retirement plan, 401(k), 403(b), IRA, Keogh, or other qualified pension plans.

Securities: a document indicating ownership or creditorship; a stock certificate or bond.
 

Trust: a written arrangement between an owner and trustees. The owner hands over property and/or funds to a group of people (called trustees) who look after the property and funds and use it for the benefit of other people (called beneficiaries) for a specific objective.  

Will: the most basic instrument used to distribute an asset, also called Last Will and Testament. A will is a legal document that spells out the disposition of a person’s assets after