With some thought and planning, you can meet your giving and financial planning goals while supporting your faith. We explore how to meet those goals.
Like many successful people, you’ve likely made important achievements in your life through a combination of setting goals, working hard, and receiving abundant blessings from God. Setting goals helps us remain focused on the things that are important to us while providing a “finish line” to keep us motivated.
But while many think of goal setting in terms of work, income, and even retirement planning, not everyone takes the same approach to charitable giving.
However, with some thought and planning, you can achieve a number of giving and financial planning goals while supporting your faith and the causes dear to you for a long time to come. “Planned gifts” can allow you to create win-win solutions for you and your parish or favorite Archdiocesan Catholic school or ministry.
Goal #1: Create a Long-Term Gift That Doesn’t Cost You Anything During Your Lifetime
When you designate a charitable gift in your will or through a beneficiary designation on an insurance policy or retirement account, the gift is made after death, giving you maximum flexibility to use your assets if you need them during your lifetime. Your gift can be designed for a specific use by your chosen charitable organization or as the organization sees fit. Or you can donate a specific amount — such as $25,000 to fund a Catholic Community Foundation endowment fund, which will support the cause in perpetuity.
Goal #2: Leave More of Your Estate to Your Heirs
Your estate is likely made up of a variety of assets that may include real estate, retirement plans, investment accounts, and more. However, depending on the size of your estate and the assets you own, your estate may face a variety of complicated tax consequences upon your death. Among the trickiest is the treatment of qualified retirement accounts, especially in how heirs must take and pay taxes on disbursements.
To simplify the process and eliminate tax issues, some people make planned gifts from their retirement accounts, designating their favorite charity as a beneficiary. That leaves assets with less complicated taxation requirements to heirs, potentially reducing gift and estate taxes, and freezing the taxable value of growing assets before they pass to your family.
Another option is a charitable lead trust. This giving vehicle allows you to structure a trust fund that pays income to your chosen charitable organization, such as the Catholic Community Foundation, for a fixed time. Then, the remainder is paid to your heirs. This structure allows your family to reduce the size of the estate and possibly avoid estate taxes by reducing the size of the estate below the threshold.
Goal #3: Provide Income for Loved Ones
When you create a giving plan that includes a charitable gift annuity, charitable remainder annuity trust, or charitable remainder trust, you can:
- Receive a tax deduction in the year you fund the instrument, subject to income and other restrictions
- Benefit from regular income during your lifetime to support yourself and your loved ones
- Diversify your holdings to mitigate risk
You can fund these types of giving vehicles with cash, securities, or even property. The minimum suggested contribution for a charitable gift annuity is $10,000. The minimum suggested contribution for a charitable remainder annuity trust or charitable remainder trust is $100,000.
Goal #4: Create a Long-Term Gift That Won’t Draw Funds From Your Estate
If you want your estate to pass fully to your heirs, but still create a lasting legacy, it’s possible to do both. Simply purchase a new life insurance policy and name your chosen charitable organization as the beneficiary. You may also leave a portion of an existing policy to the organization.
Goal #5: Share Your Philanthropic and Estate Planning Priorities With Your Family
Part of your legacy is the Catholic values that you’ve passed down to future generations. Planning a long-term gift or giving strategy with your family reinforces those principles in a variety of ways. In addition to helping them understand how the estate will be structured and divided, you’ll also be able to share in making charitable giving decisions as a family. This will allow you to form a bond through service to those organizations that uphold your Catholic values.
The Catholic Community Foundation offers many ways to meet your charitable giving goals while supporting the causes that you care about. If you are interested in exploring your charitable giving options with the Catholic Community Foundation, please contact us.
