Gifts That Don't Impact Your Lifestyle
Are you looking to make a gift for Birthright Israel's future that doesn't affect your cash flow or portfolio now?
For many individuals, a gift by will or through their revocable living trust is an effective way to accomplish estate and tax planning through gifts to charities. A bequest may take several forms. Among these are:
- A specific amount expressed in dollars or in specified items of property.
- A percentage of the residuary of the estate (the amount available for distribution after specific bequests are paid).
A bequest may be designated for a particular purpose or program or may be left without restriction for Birthright Israel to use in its discretion for needs that must be met at the time we receive the payment from your estate. A bequest may also be endowed so that only income and/or portions of principal may be used to carry out the purposes set out in your will. In the case of an endowed bequest, any designations ought to be broad enough to enable Birthright Israel to use the funds for programs or purposes then in need of support, particularly since the endowed fund may be set up in the will to run in perpetuity.
When bequests are made to establish designated, unrestricted or endowed funds, they may provide that the funds be named in honor or in memory of particular individuals, foundations or families.
Have you already prepared a bequest naming Birthright Israel Foundation as a beneficiary? Let us know by completing our Declaration of Intent.
If you would like to include Birthright Israel Foundation as a beneficiary in a bequest, you may consider the language noted below. For additional guidance you may contact Foundation Futures. Where appropriate, please consult a tax or legal professional.
Unrestricted General Legacy (Outright Bequest)
I bequeath to Birthright Israel Foundation, a New York State, not-for-profit corporation having its principal offices at 33 E. 33 Street, 7th Floor, New York, NY, 10016, the sum of ____________ ($______) dollars [or] ____ percent (____%) of my [residuary] estate to be used for its general charitable purposes.
Bequest for Specific Designation
I bequeath to Birthright Israel Foundation, a New York State, not-for-profit corporation having its principal offices at 33 E. 33 Street, 7th Floor, New York, NY, 10016, the sum of ____________ ($______) dollars [or] ____ percent (____%) of my [residuary] estate to be used to (insert specific designation here).
Option for Named Endowment for Specific Purpose
I bequeath to Birthright Israel Foundation, a New York State, not-for-profit corporation having its principal offices at 33 E. 33 Street, 7th Floor, New York, NY, 10016, the sum of ____________ ($______) dollars [or] ____ percent (____%) of my [residuary] estate to establish an Endowment Fund bearing the name(s) of ____________. The principal of the Endowment Fund will be held intact in perpetuity and only the net income thereof will be directed for the purpose of providing (insert specific designation here). The percentage rate of "net income" earmarked from the Endowment Fund will be determined on an annual basis by a resolution of the Birthright Israel Foundation Board of Directors in accordance with their approved spending rule for such Endowment Funds.
Gifts of Life Insurance
Do you have a life insurance policy that you no longer need for its original purpose?
Did you know that you can leverage life insurance to leave a lifetime legacy?
Life insurance can represent a significant gift to Birthright Israel at a relatively low cost to you. The gift can be accomplished in various ways:
- By contributing an existing policy — you have a policy on your life transferred into Birthright Israel's ownership which is named the irrevocable beneficiary; if there are additional periodic premium payments to be made, you would make additional contributions to us from time to time from which we may elect to pay the premiums on the policy Birthright Israel owns on your life.
- By acquiring a new policy — with Birthright Israel named as owner/beneficiary and you as insured; if the policy is not fully paid for at the time it is contributed, then subsequent premium payments will be made by us from contributions you made periodically over the life of the policy.
Have you already prepared a gift of life insurance naming Birthright Israel Foundation as a beneficiary? Let us know by completing our Declaration of Intent.
Gifts of Retirement Plans
Did you know that your heirs might receive only 25 cents on the dollar when you leave them your IRA?
Are you looking to preserve your retirement assets from double taxation?
Most people are shocked to learn that if retirement assets (e.g., an IRA, 401[k], or any other qualified plan) are left to a non-spousal beneficiary, estate and other tax obligations can reduce the amount passing to your heirs, often in excess of 75% of their value. This could mean that for every dollar you had anticipated leaving to your loved ones, they would actually receive 25 cents. Clearly, this is not what you intended to happen to your retirement plan.
After taking into account the amount in your plan and minimum withdrawal requirements and determining what is needed to support your current lifestyle, a charitable gift might provide a solution. For example, if you intended to include charitable bequests as part of your estate, naming us as beneficiary of the qualified plan will avoid all income and estate taxes. Birthright Israel will qualify to receive the intended amount in its entirety, at no tax cost.
It is also possible to create a charitable remainder trust by withdrawing all or a portion of the plan assets after you reach at least age 59 ½ and placing the net amount, after income taxes, in the trust. Although there will be some tax obligation on the withdrawal, it will be reduced by the charitable deduction derived from the charitable remainder trust. The trust will pay income, possibly tax exempt, for the rest of your and your survivor's lifetimes. You can choose to use this income to replace a substantial portion of the value of the plan for the benefit of your heirs free of estate and other taxes.
This can also be accomplished by creating a charitable remainder trust that will take effect at the end of your lifetime for the benefit of the surviving spouse using the assets in your qualified retirement plan. Your spouse, as life income beneficiary of the trust, can use some of the economic benefits received from the trust to replace its value for your heirs at low transfer tax cost.
It is also possible to designate a charitable remainder trust as beneficiary of your retirement plan to ensure that your survivor receives an additional source of income for his/her lifetime. Please contact us to learn more.
Have you already prepared a gift of a retirement plan naming Birthright Israel Foundation as a beneficiary? Let us know by completing our Declaration of Intent.
Gifts of Residence
For someone who is philanthropist, do you feel that there is a tremendous amount of your net worth tied up in one asset?
Do you have the desire to donate your house to Birthright Irsael but keep using your home for your lifetime?
Do you occupy your vacation home only a few months a year and wish to make a big impact for Birthright Israel now?
Do you feel that you need additional financial support to assist in your current cost of living?
For most people, their home represents a significant portion of their personal net worth. In addition to providing the security of a physical and emotional base, a home can appreciate greatly in value. As a non-productive asset it is usually difficult to extract any economic benefit from one's home other than by actually selling it. However, there are two charitable gift strategies that may be helpful.
Retained Life Estate
You may donate your residence and still retain uninterrupted use and occupancy for the remainder of your (and your survivor's) lifetime. The property is conveyed by deed to Birthright Israel subject to the life estate. By donating this future interest in your home to us, you will generate a current charitable income tax deduction and exclude the property's value from your estate for estate tax purposes.
This can be done not only with a primary residence but also with a vacation home. With a vacation home, you need not use a life-estate agreement if you do not use the home for the entire year. If, for example, you spend three months of every year there and it remains unoccupied for the balance of the year, a ¾ interest (i.e., those nine months) can be transferred to generate an immediate income tax deduction equivalent to ¾ of the fair market value of the property. You would still be able to enjoy the property for your customary three months each year.
Have you already prepared a gift of a residence naming Birthright Israel Foundation as a beneficiary? Let us know by completing our Declaration of Intent.