Planned Giving
Planned Giving Options
Simple Bequests
You can make a bequest to The Madison Foundation through your will or living trust. Donors who leave a charitable bequest may qualify for an estate tax deduction based on the value of the gift. Your attorney can create the documentation to be included in your estate planning documents. A gift can take the form of a specific sum or asset or a percentage of the estate.
Qualified Charitable Distributions
Making a qualified charitable distribution (QCD) or a direct transfer of funds from your IRA payable to the Foundation can satisfy your annual required minimum distribution if done correctly. Unlike regular IRA withdrawals, a QCD benefits you by reducing your taxable income while supporting the mission of the Foundation. Keeping taxable income lower may reduce the impact to certain tax credits and deductions, including Social Security and Medicare
Can I Make a QCD?
Many accounts are eligible for QCDs including traditional, rollover, inherited, SEP (inactive plans only), and SIMPLE (inactive plans only). Here are the requirements:
- You must be 70 ½ year old to make a QCD
- QCDs are limited to the amount that would otherwise be taxed as ordinary income
- QCDs are limited to the amount that would otherwise be taxed as ordinary income
- Funds must come directly from the account to the Foundation
- To make a QCD for the current year, the funds must come out of your account by December 31st of that year
To figure out the best route for you, please consult with your tax or financial professional. Please let us know if you have any questions. We are happy to meet with you to discuss the best giving options for you and your family.
Charitable Remainder Trust
Establishing a charitable remainder trust allows named beneficiaries to receive income payments for life. The trust pays beneficiaries a fixed or variable income throughout their lifetime or for a fixed term. There is a substantial charitable income tax deduction as the asset is removed from your taxable estate. When the trust term expires, the remainder is then distributed to a fund at the Foundation.
A charitable remainder trust offer the following benefits:
- Eliminates immediate capital gains taxes on the sale of appreciated assets, e.g. stocks, bonds, or real estate
- Reduces estate taxes of up to 55 % that may be payable at your death.
- Reduces current income taxes by obtaining an income tax deduction.
- Increases your spendable income throughout the rest of your life.
- Creates a significant charitable gift fund.
Charitable Lead Trust
Assets donated to a charitable lead trust are invested by the Foundation and paid annually to the donor’s established fund for a period of years. Upon expiration of the trust period, the appreciated assets are passed onto the donor’s children or loved ones with minimal or no gift or estate taxes.
Charitable Gift Annuities
A gift of a charitable annuity creates a contract between the donor and the Foundation to pay beneficiaries a fixed payment for life. When the gift annuity terminates the remaining assets are then contributed to a fund at the Foundation. Tax advantages include an immediate income tax deduction and potentially beneficial tax treatment of annuity payments.
Gift of Real Estate
Making a gift of real estate is an ideal way to turn property gains into community good. The gift qualifies for a tax deduction based on its full market value and the donor avoids the capital gains tax that would otherwise arise from the sale of the property. Real estate can also be deeded to the Foundation who will use the proceeds from the sale of the property for the purpose designated by the donor.
Retirement Plan Assets
Using a retirement plan to establish a fund with the Foundation is one of the best assets to transfer to a charity because of the tax benefits to the donor’s heirs. Retirement fund assets distributed to family members may be subject to double taxation, first through the donor’s estate tax, and then through the beneficiaries’ income tax. Making such a charitable bequest can avoid the typical income and estate taxes. A beneficiary designation form can be obtained from your retirement plan administrator. While retirement plan assets may not be transferred directly to a charity during your lifetime, income may be distributed from the plan to the donor and then contributed to the charity. A charitable tax deduction will offset potentially taxable income.
Life Insurance
Irrevocably assigning an insurance policy to the Foundation offers substantive tax benefits. Such contributions receive an immediate federal income tax charitable deduction in the year of the assignment. To contribute a life insurance policy, you have to irrevocably name the Foundation as the owner of the policy. As the beneficiary, the Foundation will receive the death benefit upon termination. Donors can deduct the calculated value of the policy as a charitable gift.
The Heritage Society
The Heritage Society recognizes and honors donors who have made estate plans to give back to the community by designating future gifts of $10,000 or more to the Foundation. These future gifts can be bequests, a beneficiary designation, trusts, or other deferred gifts. These gifts have a powerful and lasting impact on Madison and will be a continuing source of strength and support for the causes important to you.
Heritage Society members help us fulfill our mission of making Madison a better place to live, now and in the future with their planned giving. Learn more HERE.
