You don’t have to be wealthy to make a significant gift.

There are many ways that you can make a significant, legacy-building gift without having to write a check today. Some great examples are:

a. Bequests or Gifts by Will: An estate tax deduction is provided for the gift but there are no income tax implications.

b. Revocable Trusts: Those persons who have created “Living Trusts” may also provide for gifts on the death of the Trustor, (or triggered by some other tax event). There are no income tax consequences until the transfer takes place.

c. Gift of Real Property with Retention of Life Estate: A person may give property to Neighbors, but reserve the right to use the property for the balance of his and/or her lifetime(s)). An income tax deduction is allowed for the remainder value of the gift. Income or business property may not be used for such a transaction.

d. Charitable Remainder Trusts: Involves an irrevocable gift of assets or asset into a trust. Income is paid to the contributor (or other person or persons) for life or a predetermined number of years. On the death of the income beneficiary, the assets of the trust are transferred to Neighbors. An income tax deduction is provided for the value of the remainder. There are two types of such trusts:

1. Charitable Remainder Annuity Trust: Pays a fixed amount (set at the time of trust creation) to the income beneficiary. The amount of the payment stays the same for the life of the trust.

2. Charitable Remainder Unitrust: Pays a fixed percentage of the value of the trust revalued each year. The amount of payment fluctuates with the value of the trust.

e. Charitable Lead Trusts: Involves the transfer of assets to a trust with income to a charity for a period of years. At the end of the period the assets revert to the contributor or some other named party.

f. Pooled Income Funds: Like a charitable mutual fund, assets are irrevocably transferred to the fund by a contributor who receives all the income generated by his/her prorated share of the fund total. On the death of the income beneficiary that share is transferred to Neighbors. A charitable income tax deduction is allowed for the remainder value.

g. Charitable Gift Annuity: An arrangement whereby a contributor transfers assets to charity in return for an annuity payment. The charitable gift annuity places the full faith and credit of Neighbors behind the annuity payment.

To learn more contact Dan Russell, Neighbors, Inc. Development Director, at (651) 306.2148 or dan@neighborsmn.org.

This is not professional tax or legal advice. Donors must consult their tax and legal advisors regarding their specific situation.