The Ministry of Gift Planning
All that we are, all that we have, comes from God and will one day return to God. We are stewards of God’s bounty…caretakers. For a brief period we are given time, energy, and resources. What we do with these gifts ultimately defines the character of our life and the depth of our spiritual understanding.
Gift Planning is one expression of the wise use of the personal resources God has entrusted to us. Understanding gift planning and making it available through Ascension is both a stewardship ministry to you the donor (giving the donor a means of thoughtfully transferring resources to the next generation), and to Ascension (helping Ascension to gather the resources necessary for its continuing mission and ministry).
Gift planning encompasses a variety of ways that gifts can be made to Ascension from accumulated resources. It usually involves financial or estate planning; however, it is not reserved just for the wealthy. Gift planning is a means by which anyone concerned with the wise use of his or her personal resources makes a considered choice about their ultimate disposition.
In General Planned Gifts are Made Through:
- A Gift in a will
- A Life Income Gift such as a pooled income fund, a charitable gift annuity, or a charitable remainder trust
- Direct Gifts of Special Assets (real estate, closely held stock, life insurance, pre-tax assets)
Gift planning establishes a way for you to provide for your family members while remembering Ascension as well. It often enables you to provide more for your heirs and to make a larger gift to Ascension than thought possible. It often reduces taxes.
Planned gifts can be designated for Ascension’s general fund, a specific ministry or for an endowment.
Planned gifts are either outright gifts (i.e., gifts of appreciated securities, real property, personal property, etc.) or deferred gifts (i.e., charitable gift annuities, charitable trusts, testamentary gifts).
The following are brief descriptions of several forms of gift planning that can be used to benefit the donor, the donor’s family, and Ascension, for now and for many years to come.
A Gift or Designating a Beneficiary
Perhaps the easiest and most common way of making a planned gift is through your will and/or designating beneficiaries on pre-tax investment accounts. A bequest in a will can take the form of a set amount of money, a percentage of an estate, a specific asset or a trust; or you can name Ascension as a beneficiary.
Sample language for including Ascension in your will might be: “I give (state amount, asset, or percentage of the state) to the Episcopal Church of the Ascension, 8787 Greenville, Ave., Dallas Texas 75243.”
Life Income Gifts
Life Income Gifts provide you or your designated beneficiary an income for life in exchange for your gift. They can be established in several ways, the most common of which includes the Episcopal Church Foundation’s Pooled Income Fund, a Charitable Gift Annuity, and a Charitable Remainder Trust.
In the Pooled Income Fund, gifts ($2,500 minimum) are “pooled” with other gifts and invested in a professionally managed investment portfolio. The donor receives the following benefits:
- A guaranteed income for life. The amount of the income depends on the rate of return on the fund’s investments. The income can also flow to another designated beneficiary.
- An immediate federal income tax deduction. The amount of the deduction is usually based on the age of the donor and/or beneficiaries.
- The elimination of capital gains taxes, if funded through appreciated securities.
- A possible reduction in estate taxes. At the death of the final beneficiary, the property goes to the church or church-related beneficiary that you named.
The benefits of establishing a Charitable Gift Annuity are similar to that of the Pooled Income Fund with the following differences:
- The income for life is guaranteed at a fixed rate.
- A portion of the gift is deductible from income taxes.
- Some of the income received would be tax exempt.
- The minimum gift is $5,000.
A Charitable Remainder Trust usually involves larger sums of money (such as $100,000 or more) and is managed individually. Like the Pooled Income Fund and the Charitable Gift Annuity, the Charitable Remainder Trust provides income for life, an income tax deduction, relief from capital gains taxes (if funded through appreciated property), and a possible reduction in estate taxes. A Charitable Reminder Trust can be added to over the years, and a portion of the Trust can be set aside for growth as a hedge against inflation. The rate of return fluctuates based on the performance of the portfolio.
If you are seeking a set rate of return annually, a Charitable Remainder Annuity Trust is an option to consider.
The Charitable Lead Trust, another estate planning tool, enables you to transfer assets to a trust that pays its income to Ascension for a set period of time. At the end of the term, the principal and all capital appreciation returns to you or others that you name.
Gifts of Life Insurance
Life insurance is another way to make a sizeable gift to Ascension. For example, you can purchase a new policy and make Ascension the owner and beneficiary of the policy. This enables you to “leverage” your gift, ultimately making a much larger gift than otherwise possible.
Contributions to Ascension to pay the ongoing premiums become tax deductible. You can make the church the owner and beneficiary of an existing policy. The current value of the policy may be tax deductible under contemporary tax laws, as may future premium payments. You can make Ascension a beneficiary of an existing policy, i.e., name Ascension to receive the proceeds of the policy. Also, you can use life insurance in conjunction with another planned gift. For example, you can purchase life insurance with the income received from a life income trust, thus replacing, and in some instances, surpassing, the principal removed from the estate by the gift.
A will and the gifting options briefly outlined on this site require the involvement of a lawyer specializing in wills and estate document preparation and possibly a financial advisor with fiduciary credentials. Additional information, as well as confidential legal and professional financial referrals can be obtained from your Ascension Stewardship Committee.
Content for this pamphlet was adapted from the Episcopal Church Foundation publications Prepare to Write Your Will and The Ministry of Gift Planning.