How do you want to be remembered?
Christ Church has been blessed by a growing number of parishioners who have generously remembered the church in their financial plans. These parishioners – past and present -- have cared deeply that the life and ministry of Christ Church remain a spiritual beacon in Coronado for generations to come. Without these gifts, it is certain that Christ Church would be a much different place.
It was over a century ago that Captain and Mrs. Charles Hinde donated the land and funds for the construction of Christ Church. This same generosity has continued over the decades. Today, the income from a donated trust helps with the operating expenses of the church. Recent planned gifts have allowed the church to install artificial grass, to purchase new vestments and altar appointments, and to make considerable improvements to the rectory.
Making a planned gift is not just for those who have enormous wealth or special financial expertise. Planned giving is for anyone with a generous spirit who wants to remember Christ Church in their financial plans. There are many creative options to consider in making a charitable gift to the church, including those with tax benefits.
Where to start if you are interested in giving a gift? Consider first reflecting on the matter in prayer. There is no need to go it alone. If you would like to discuss your intentions with us, the rector would welcome the opportunity to meet with you. You can make an appointment with the Rector at email@example.com.
Individual Endowment Funds
Ways to fund your gift
Charitable Annuity Opportunities
We usually think of legacy giving as occurring after the reading of our will or trust. There are also other ways to make legacy gifts to our church by giving away assets before we die and having those assets provide us a lifetime income. The two most popular methods to accomplish this are a Charitable Gift Annuity (CGA) and a Charitable Remainder Trust (CRT). Both are similar, in that the donor conveys assets to a trustee, who establishes a lifetime income stream; and the donor receives a sizeable tax deduction. The differences are generally scale with CRTs often involving larger contributions, and flexibility, with CGAs offering a wide range on income start times, making this an attractive method for younger donors. If all this sounds complicated and expensive to implement, please be aware that the Episcopal Church Foundation has attorneys who will assist you in setting up a CGA or CRT that suits your situation with no outlay on your part. If you want to know more about converting some of your assets into an income stream, while gaining a substantial tax deduction and providing the church with a major long term gift, please contact Sue Steven (619-995-9088) or any member of the Christ Church planned giving committee.
Pooled Income Fund
Are you looking for a trustworthy investment fund that you don’t have to manage yourself, yet it will pay you income for your lifetime and then use the remainder at your death for a charity that you want to see perpetuate? Then a pooled income fund may be for you, and the Episcopal Church Foundation can help.
A pooled income fund is a trust that is established and maintained by a public charity, in this case the Episcopal Church Foundation. The pooled income fund receives contributions from individual donors that are commingled for investment purposes within the fund. Each donor is assigned "units of participation" in the fund that are based on the relationship of their contribution to the overall value of the fund at the time of contribution. Each year, the fund's entire net investment income is distributed to fund participants according to their units of participation. The advantage of a pooled income fund is that many small donations (the minimum donation is $2500) are pooled to take advantage of investment opportunities that are normally restricted to large investors.
Upon your death, the remainder is used as you had designated, for any charity within the Episcopal church, e.g. your parish, school, diocese, mission or combination thereof.
Contributions to pooled income funds qualify for charitable income, gift, and estate tax deduction purposes. The donor's deduction is based on the discounted present value of the remainder interest. Donors can also avoid recognition of capital gain on the transfer of appreciated property to the fund. Finally, the income can be designated for yourself, or any other person you choose at the time of the donation. For more information, contact the episcopalfoundation.org or 1-800-697-2858
Gifts of Appreciated Real Estate
Do you want a really large tax deduction but don’t have the liquid assets to “create” one? Do you own your home, or perhaps even a second home, empty land, or investment property? Did you know you can donate a percent of the value of that property without selling the property in the year you claim the tax deduction? If this fits your situation, read on.
Similar to stocks, if you donate real estate that has appreciated in value over the years, you can avoid capital gains tax. However with real estate, you can donate all or a portion (as a percent) of the real estate to a qualifying charity such as Christ Church in the form of a title to such property. You can take the tax deduction immediately, but the sale of the property can happen at a later time. There are specific rules to qualify. First, you must have the property officially appraised within 60 days prior to making the gift. Second, you cannot have a prearranged buyer, price, or contract to legally sell the property prior to the gift being made.
The advantage to you is that you get both a California and Federal income tax deduction for the appraised value of the property you donate. You avoid capital gains tax for the appreciated value of the property you donate, and you reduce your estate value which might reduce any estate tax you pay. The charity receives the proceeds (or percent if a partial gift) from the sale of the property at the time it sells. As real estate value fluctuates, the charity may receive more or less than the appraised value. Also, if you have a mortgage or loan on the property, it will have to be satisfied or addressed.
As this is a relatively obscure way to donate assets to a charity, please contact your tax accountant, financial advisor, and lawyer for further guidance. The Episcopal Church Foundation also has a retained attorney on staff for unique gifting guidance.
Gifts of appreciated stock
Want to know what a dozen of Christ Church parishioners do every year to make their gift to the church go further? They watch the stock market and when they think it is at a high point in the year, they give appreciated stock to the church by simply calling their broker and transferring shares to the church’s Fidelity account. They do it once a year to meet their annual pledge, or perhaps for a special donation to the school or the endowment.
Giving appreciated stock shares can be a most effective manner to make a gift and also provide important tax savings. By providing the appreciated stock directly to the charity, all capital gains taxes on the stock are avoided. You also will be eligible to receive an income tax charitable deduction for the full fair-market-value of the stock at the time of the gift. To qualify for these special tax advantages, the security must have been held for at least one year. The gift may be contributed to the charity in stock certificate form, or by a transfer from your account to the charity’s account. Your gift of appreciated stock is generally fully deductible up to 30% of your adjusted gross income.
As an example of the tax savings of donating securities versus a cash gift, assume you wish to donate shares of stock worth $10,000 that you purchased for $2,000 several years ago. In this case, you would receive a deduction of $3500 for the gift, as well as avoiding $1200 in capital gains taxes (assuming a 35% tax bracket). For the cash gift, you would only receive the $3500 deduction.
Please contact the Church Office if you want to explore gifting appreciated stock to Christ Church. As always, consult your tax advisor as appropriate.
Unique Giving Opportunities for Seniors of 70
The 2015 IRA charitable rollover legislation makes the IRA charitable rollover permanent. The charitable IRA rollover, or qualified charitable distribution, allows you to use your IRA assets to make charitable gifts. It is a special provision that allows individuals age 70 1/2 or older to transfer IRA assets, up to a total of $100,000, directly to public charities, such as to the Christ Episcopal Church Endowment Fund. What a wonderful way to build up our church’s endowment! These contributions will not be added to your taxable income for that year. However, you may not take a charitable tax deduction for this contribution. These transfers can also count toward their required minimum distribution (RMD) – see RMD info below.
Making a donation under this provision is simple and straightforward. If you would like to make a qualified charitable distribution to Christ Episcopal Church from your Individual Retirement Account, please speak with your IRA administrator and/or your personal CPA. You should include the church EIN on your withdrawal request.
Your required minimum distribution (RMD) is the minimum amount you must withdraw from your IRA, SEP IRA, SIMPLE IRA, or retirement plan account (e.g., 401k) after you reach age 70½. Roth IRAs do not require withdrawals. You can withdraw more than the minimum required amount each year. Your withdrawals (except for qualified charitable distributions) will be included as taxable income for the year. Generally, an RMD is calculated for each non-Roth retirement account annually by using an IRS table. Although the IRA custodian or retirement plan administrator may calculate the RMD, the IRA or retirement plan account owner is ultimately responsible for calculating the RMD. If the owner fails to withdraw the full amount of the RMD, or fails to withdraw it on time, the amount not withdrawn is taxed at 50%. For additional information, please see www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs.
Frequently Asked Questions
How do I amend a revocable trust?
So, you have made the decision to include Christ Church and perhaps some other charities in your estate planning. But then, you remember that you have already set up a revocable trust for your estate. How difficult will it be to amend your trust so Christ Church and those other charities are included? The definition of a revocable trust is a trust whereby provisions can be altered or canceled dependent on the grantor. The important thing to know is that the change should be a separate document, rather than pen & ink changes to your original trust. It can be a very simple one page document, and if you ask your attorney, he/she is likely to make changes to trusts for free if you are giving money to a charity.
Why do I need a will?
No matter what our financial status is, we all have assets that should be allocated after we pass away. A properly executed will, or other type of estate plan, accomplishes that for us and our loved ones. It spells out our desires and decisions, rather than forcing our heirs to figure it out. And, since California law provides for the allocation of an estate without a will to be decided by the courts, your estate plan can avoid an expensive process that will diminish any inheritances.
A will can be as complex or simple as you want to make it. You can obtain legal advice from an attorney, or you can do your own research and/or purchase will-making kits from a variety of reliable sources. You should not avoid preparing a will because it is too expensive or time-consuming – the consequences of not doing this can become a burden to your family.
But even more important than avoiding all these pitfalls, a will also enables you to remember those entities that are important to you. While a will’s primary purpose is to provide support for your family members, you may, upon reflection, discover that some organization(s), such as your church, school, charity, or an arts group, have great meaning to you, as well. You legacy gift can help sustain them after you are gone. It is perfectly proper to include these groups in your estate plan, and removes the strain of making these decisions from your heirs. When naming an organization, such as Christ Church, in your will, it is recommended that you allocate a percentage of the estate, rather than a specific dollar amount. This will ensure that your beneficiaries are not penalized if your estate value falls in the future.
How can I direct the use of my beneficiaries?
Because many people do not have a will, a number of your financial accounts require you designate a “beneficiary,” that is, someone to inherit the balance of the funds in that account upon your death. Your beneficiary designations are probably the single greatest estate planning tool you have available (other than a living trust). Yet very few people take the time to make informed decisions.
In general each account (bank, savings bond, IRA, 401K, Roth IRA, life insurance, annuities, securities, stocks, bonds, mutual funds, and deferred compensation) will have a form you fill out to designate your beneficiary. These forms usually have a primary and secondary beneficiary (in case the primary one dies before you update the form). In addition, the primary and secondary beneficiaries can often be more than one person, organization or trust, splitting the proceeds in parts (like 50/50 or 20/30/50 percent). These forms do not require a lawyer, but in some cases may need to be notarized.
Each of these financial accounts have different rules. For example, retirement accounts allow your beneficiaries to continue deferring the tax on some or most of your retirement accounts. Those retirement accounts are best left to individuals, such as family members. Other accounts such as life insurance, deferred compensation and bank accounts etc. are great candidates to leave to a charitable organization, such as Christ Church. Again, you can leave all or a % of the balance to the church.
It’s important to re-evaluate your beneficiary designations every year or two as tax laws change, family members change and the charities that are important to you change. This is easy to do by calling the account’s customer service number or going on line to their beneficiary form page. Be sure to keep a paper copy of these completed forms with your important files. Finally, beneficiary instructions override a will, so it is important to keep them in synch if you use both for estate planning.
What is the Christ Church tax identification number?
For legacy giving purposes, the tax identification (EIN) for Christ Church is 95-1866088.
*the information on this page is provided for information only and is not meant as legal advice.