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Planned Giving - Great for JASA, Great for You

Planned Giving – the process of planning a contribution now, to be allocated at a later date – is a unique, easy-to-use philanthropic tool that often provides meaningful benefits to both donor and recipient. Below, you’ll find a user-friendly overview of both the basics of Planned Giving, and the many ways in which you can make a Planned Gift to JASA. 

If you have already made a Planned Gift to JASA, and haven’t alerted us of your generous intentions, please do so. Your support qualifies you to be a member of JASA’s Legacy Society, a group of philanthropic leaders who share your foresight and generosity. 

Please Note: Planned Giving, like all financial planning, should be undertaken thoughtfully and with the assistance of a professional. The Development Department at JASA is always available to answer questions and to assist you and your financial planner. For more information, please contact the JASA Development Department at development@jasa.org or 212.273.5320. 

What is an estate plan?

Why do you need an estate plan?

Testamentary Gifts
Lifetime Gifts

What is an estate plan?

An estate plan is the mechanism by which you transfer your property during life (lifetime gifts) and then at death (testamentary gifts) to your chosen recipients – recipients who may be individuals and/or charities. Your personal circumstances, goals, needs, concerns and preferences will determine how you structure your estate plan and the role that tax minimization will play in the process. Estate plans may differ significantly, but certain basic principles and techniques are common to most. Estate plans are often comprised of wills and revocable trusts:

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Wills:

A will is a document that directs the disposition of your property upon death and appoints fiduciaries to carry out your wishes. A will can create trusts that will come into existence upon your death to provide for your beneficiaries. These trusts may minimize taxes.

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Revocable Trusts:

A revocable trust agreement can accomplish almost all of the same results as a will. A revocable trust is often accompanied by a simple will that pours the entire estate into the trust for ultimate disposition of your estate, governed by the terms of the trust agreement. This combination of a simple pour-over will and a revocable trust is often used in jurisdictions where probate is costly or cumbersome or where a greater level of privacy may be achieved by holding assets in trust form rather than outright.

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Why do you need an estate plan?

If you die without a will while owning property, that property will be distributed to your heirs pursuant to the statutory law of the state in which you domiciled at the time of your death. This result may be quite undesirable. Thus, planning for death by either will or revocable trust is critically important.

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Testamentary Gifts

Every dollar that you leave under your estate plan to JASA will be deductible for estate tax purposes since gifts to JASA are recognized as tax exempt by the IRS and generally qualify for a charitable deduction by your estate.


What are the different kinds of testamentary gifts?

Testamentary gifts to JASA may be made as specific legacies under your will or revocable trust, in cash or in kind, or to charitable trusts. If the gift is of property, rather than cash, special rules must be observed (contact JASA’s Development Department for more information). Gifts may also be made to trusts created under your will or revocable trust agreement that benefit both charities and individuals (“split-interest” trusts). See below for more information about split-interest trusts.

You may also designate JASA as a beneficiary of a portion or all of the residue of your estate. The net testametnary gift to JASA, once calculated for the purposes of your estate tax return, may qualify for an estate tax charitable deduction.

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Lifetime Gifts

By gifting to JASA now, you remove from your estate all future appreciation and income generated by the gifted property between the date the gift is made and the date of death. Lifetime gifts made to JASA are recognized as tax exempt by the IRS and generally qualify for a charitable deduction, which makes them effectively exempt from gift and estate tax. Lifetime gifts to JASA may be made outright, in cash or in kind, or to charitable trusts. If the gift is of property, rather than cash, special rules must be observed (please contact JASA’s Development Department for more information). Lifetime gifts may also be made to trusts that benefit both charities and individuals (“split-interest” trusts). See below for more information about split-interest trusts.

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What are the different kinds of lifetime gifts?

Gifts of life insurance to JASA:

Since liquidity available to you during your lifetime may be tied to your maintenance, support, and healthcare, it may be possible for you to leave JASA a Planned Gift through life insurance payable on your death. You may appoint JASA to be a full or partial beneficiary under your policy or, if the policy is paid into a life insurance trust, JASA may be an income or principal beneficiary under the trust agreement. If your policy is includible in your estate, to the extent your estate is taxable, JASA’s portion of the gift may be estate tax-deductible on both the Federal and State levels.

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Gifts into charitable trusts for JASA:

Transfers for charitable purposes to JASA can generate substantial Federal income, gift, and estate tax savings. You can create a trust with JASA as a charitable beneficiary and take advantage of the charitable income (if as a lifetime gift) and estate (if as a testamentary gift) tax deductions. You can also choose to have a single trust benefit both JASA and non-charitable beneficiaries and choose which type of beneficiary will benefit first and which type will benefit second.

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Gifts into "split-interest" trusts:

If you would like the interests of JASA to come after the interests of the non-charitable beneficiaries – your children or grandchildren, the trust is called a Charitable Remainder Trust (CRT). With a CRT, assets are transferred, either by Lifetime Gift or by your will, to a trust requiring the payment of an annuity (for a Charitable Remainder Annuity Trust (CRAT)) or a unitrust amount (for a Charitable Remainder Unitrust (CRUT)) to an individual (or individuals). If someone other than the transfer or or his spouse will be receiving the annual payments, the right to receive such payments will be subject to gift tax at the time the trust is created. Restrictions are imposed on the term of a CRT, the amount of annuity or unitrust interest, and how much must remain for the benefit of JASA.

If you would like the interests of JASA to come before the interests of the non-charitable beneficiaries (your children or grandchildren), the trust is called a Charitable Lead Trust (CLT). With a CLT, assets are transferred, either by lifetime gift or by your will, to a trust requiring the payment of an annuity (for a Charitable Lead Annuity Trust (CLAT)) or a unitrust amount (for a Charitable Lead Unitrust Trust (CLUT)) to the charitable beneficiaries. On the termination of the trust, the assets will be payable to the transfer or’s non-charitable beneficiaries (children or grandchildren). The non-charitable beneficiaries, however, must be able to afford to wait until the termination of the trust to receive their remainder interests. The ultimate goal of this planning technique is for the ultimate non-charitable beneficiaries to receive the appreciated trust property, net of annuity or unitrust payments, free of all estate, gift and, under some circumstances, generation-skipping transfer taxes when the trust terminates.

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Gifts into private charitable foundations, and ultimately to JASA:

Although the income tax deductions allowed for contributions to private charitable foundations are more limited than for gifts to public charities, contributions to private charitable foundations enable a donor to make charitable contributions and take an income tax deduction for them without having to determine immediately the ultimate charitable recipient of those funds. A private charitable foundation is often an attractive estate planning tool for families with significant wealth as well as long-term charitable inclinations for nontax-related reasons. Your private charitable foundation may be used as the unifying structure linking the philanthropic goals of several family generations and branches, control of which is “passed down” from generation to generation at the appropriate time. A private charitable foundation often serves as a perpetual statement and memory of the donor's charitable interests for generations to come.

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Gifts to JASA from retirement plans:

Retirement plans are complex assets. They accumulate geometrically during life (as a result of the income tax-free compounding) but are subject to two levels of taxation upon death – estate tax and income tax. As a result, beneficiaries potentially may receive, if both taxes are applicable, as little as 20 cents on the dollar after taxes. There are, however, various estate planning strategies applicable to retirement assets that may mitigate or even completely eliminate both income and estate taxes. These strategies include using retirement assets to fund gifts to JASA and carefully selecting non-charitable beneficiaries of retirement plans to maximize the period for tax-free growth.

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    - Mary