Thoughtful gift planning can provide you and others with lifetime income, reduce your taxes (capital gains, income, estate), and allow you to make a significant gift that sustains the valuable services of the American Red Cross. Planned gifts include bequests and life-income gifts, such as charitable gift annuities and charitable remainder trusts.
The Legacy Society
Please let us know if you have made arrangements for a bequest or other planned gift. We would like to honor your commitment by enrolling you in the Legacy Society. (You will remain anonymous, if you wish.)
If you have questions or would like to share information about your estate plans, please contact Michael Kendrick, at 215-299-5495 or KendriM@redcross-philly.org.
Bequests
To make a bequest to the American Red Cross, you may wish to share the following language with your lawyer:
“I give, devise, and bequeath to the Southeastern Pennsylvania Chapter of the American Red Cross, 23rd & Chestnut Streets, Philadelphia, PA 19103, the sum of $_______ (or specify a percentage of the estate) to be used for its general purposes.”
Retirement Plans: Retirement assets such as an IRA or Keogh plan are taxed more heavily than other assets in your estate, because they are subject not only to estate tax, but also to income tax when distributed to your heirs. Naming the Southeastern Pennsylvania Chapter of the American Red Cross as a beneficiary of your retirement plan may be a tax-efficient way to give.
Fulfilling Your Intention: If you wish to have your bequest benefit local families in need, you must specify the Southeastern Pennsylvania Chapter of the American Red Cross. If you have already arranged to make a gift through your will, please check to make sure you have designated your local chapter.
Memorial Bequest: You can make your bequest in the name of someone you wish to memorialize; we can suggest ways to ensure proper recognition.
Contingent Bequest: You can stipulate that the Southeastern Pennsylvania Chapter of the American Red Cross will receive all or a portion of your estate only under certain circumstances--for example, if you are not survived by your spouse or other close family members.
Life Insurance: Many people purchased life insurance policies when they had young children but no longer need the insurance to provide financial security for their families. If you fall into this category, you can make a significant gift without sacrifice by changing the beneficiary of your policy to the Southeastern Pennsylvania Chapter of the American Red Cross. Your insurance agent can make this simple change.
Life-Income Gifts
With a life income gift, you can receive guaranteed income for life while arranging a future gift to the American Red Cross. Popular life-income gift options include Charitable Gift Annuities, Pooled Income Funds, and Charitable Remainder Trusts.
Charitable Gift Annuity
You transfer cash or marketable securities ($5,000 minimum) to the American Red Cross, and the Red Cross agrees to pay you (and another person, if you choose) a fixed, guaranteed amount annually for life. You also enjoy significant tax advantages:
- Some of the annual income is tax-free.
- You receive an income tax charitable deduction in the year you establish the gift annuity.
- If you fund the annuity with securities, you owe less capital gains tax than if you sold the shares outright, and tax payments are spread over a number of years.
The American Red Cross uses the charitable gift annuity rates recommended by the American Council on Gift Annuities. Click here to view current rates.
The minimum age at which annuitants can begin to receive payments is 65. However, you can establish the annuity at an earlier age and defer payment until age 65 or later.
Pooled Income Fund
The Red Cross Second Century Pooled Income Fund is somewhat like a mutual fund. Your gift of cash or marketable securities is added to the fund, which is invested to generate income. Each year, you receive a share of the fund’s earnings commensurate with your contribution. For example, if you donate $10,000 and the fund earns 8 percent for the year, you receive $800.
You receive an income tax charitable deduction for the full value of your gift in the year that you make the gift. However, the payment you receive is taxed as ordinary income, and the amount of the payment is not guaranteed.
Charitable Remainder Trust
This life-income gift is created by transferring assets to a trust (a bank or other financial institution) that pays you (and one or more other beneficiaries, if you wish) income for life. At the end of the trust, the remaining trust assets are transferred to the Red Cross.
Although there are costs associated with establishing and administering a charitable remainder trust, the flexibility a trust offers may make the costs worthwhile. A wide variety of assets can be used to fund a trust. There is no minimum age for beneficiaries to begin receiving payments, nor is there any limit on the number of people who can be named beneficiaries.
There are two types of remainder trusts. A Charitable Remainder Annuity Trust pays a fixed dollar amount annually, regardless of fluctuations in the value of the trust assets. A Charitable Remainder Unitrust pays a fixed percentage of the fair market value of the trust assets. The assets are revalued each year, and the payment reflects increases or decreases in asset value.
