· What is Charitable Planned Giving? >

Charitable planned giving refers to the process of making a charitable gift of estate assets to one or more nonprofit organizations, a gift that requires consideration and planning in light of the donor's overall estate plan.

· Planned Gifts >

Benefits to the Donor:

Benefits to the HSSA:

Benefit to the Homeless Animal Community:

· Types of Charitable Planned Gifts >


A. Bequest
A person could include a provision in his or her will or living trust to make a bequest to a charitable organization. That arrangement would be a "planned" gift. A gift in a will, will codicil or trust could be of cash, securities, real estate or personal property, or as a percentage of the estate. If you currently have a will, you can add a gift through a will codicil.

B. Gift Annuity
One deferred gift instrument is the charitable gift annuity. This is popular with many donors because it represents a lifetime contract between the donor and a charity, and because it is relatively simple to understand and establish. Simply, it's an irrevocable transfer of cash or appreciated property to the HSSA and in return the donor receives a guaranteed lifetime annuity of a fixed amount each year.

C. Charitable Trusts
A person might establish a charitable trust that could provide income to the donor (or someone else) for a period of time (often for life). After this gift-deferral period, the trust would mature and the remaining assets would go to one or more charitable beneficiaries.

D. Appreciated Property
A gift of securities, real or personal property, held long term which has increased in value since date of acquisition, given outright to the HSSA or as the funding asset for a lifetime income plan.

E. Life Insurance
A person may wish to name HSSA as the beneficiary of an existing policy which is no longer needed for the donor's original purpose, or to purchase a new policy making the HSSA the owner or beneficiary.

Your Will Common Questions and Answers

What is a Will?
Your last Will and Testament is a legal document that expresses your will or intent for the distribution of your estate, property and assets, after your death.
You can create your Will to provide another chance for life to thousands of our unwanted or abused animals, simply by naming the Humane Society of Southern Arizona (HSSA) as a beneficiary.

What is a Bequest?
A bequest is simply a gift made through a Will. A bequest is a vital and continuing resource that strengthens the HSSA's ability to provide refuge for innocent and orphaned animals until they find new families and adoptive homes.

Regardless of amount, all bequests are extremely valued, and make a difference in saving our homeless animals by providing support for the HSSA in its goal and passion of providing for the welfare of all the animals in our community.

Larger bequests establish or contribute to endowments which will last indefinitely, memorializing their donors in a lasting expression of their values and their lives. Endowments assure that the programs and services of the HSSA will continue to be provided far into the future - hopefully, assisting one day in being able to take care of all of our homeless. Smaller bequests help directly with operating costs, and help fight the day to day battles in protecting the welfare of our animals.

Bequests can take many forms. One may bequeath a specific amount of money or property; a specified percentage of the estate; or all or part of the residue of the estate - the assets remaining after debts and specific bequests have been satisfied. Additionally, one may designate the purpose for which the gift is intended, such as to establish a named endowment for the Humane Education Program, Shelter Program (funds are spent directly on costs associated with receiving or adopting the animals entrusted to our care) or Broken Arrow (for the care of abused animals) or the Spay/Neuter Clinic (which performs approximately 15,000 sterilization surgeries per year to combat companion animal overpopulation).

How to Make a Gift?
It's easy. To make a gift to the Humane Society of Southern Arizona, you simply include a provision in your Will specifying the type and/or amount you would like to give. Your gift can consist of almost anything - money, bank accounts, securities, antiques, works of art, or real estate.

Although the provision can be a short paragraph, the language necessary to accomplish your wishes is extremely important and should be prepared by your attorney.

Gifts in a Will may be made as a:

A Codicil to modify an existing Will

Your Will is one of the most important documents you will ever sign. It provides for the disposition of all of the property accumulated during your lifetime. It contributes to the financial security of your beneficiaries. It benefits causes you believe important and memorializes your own existence.

In the absence of a Will, the state will distribute your property as directed by certain inflexible and impersonal laws which might violate your very wish.

The following page provides sample language that you may wish to include in your Will.

Legal Counsel should be consulted prior to drafting or amending any instrument.

Sample Bequest Provision:

After having provided for loved ones, you may wish to consider a charitable bequest to the Humane Society of Southern Arizona. The provisions in your Will for a gift will depend upon the type of gift and your own circumstances. The wording in these sample provisions may prove helpful to your attorney.

Specific Bequest
"I hereby give and bequeath to the Humane Society of Southern Arizona, a non-profit Arizona corporation located at 3450 N. Kelvin Boulevard, Tucson, Arizona, 85716, Tax I.D. #86-0112798, the sum of $______ to be used for its general purposes."

For a gift other than cash simply describe the assets.
For a gift to be used for a specific purpose, merely delete "its general purposes" and specify the purpose you intend.

Residuary Bequest
" I hereby give, devise and bequeath to the Humane Society of Southern Arizona, a non-profit Arizona corporation located at 3450 N. Kelvin Boulevard, Tucson, Arizona, 85716, Tax I.D. #86-0112798, all the rest, residue and remainder of my estate, both real and personal, to be used for its general purposes."

For a gift of less than 100% of the rest, residue and remainder of the estate, merely delete "all" and state the fraction.

Legal Counsel should be contacted prior to drafting or amending any instrument.

B. GIFT ANNUITY

A gift annuity is a simple combination of two concepts:

1. A charitable gift
2. A guaranteed income for life (annuity).
   

The main difference between a gift annuity and other types of trusts involving lifetime income is that there are no third parties involved in the arrangement. As a donor, you make your gift directly to the Humane Society of Southern Arizona through a mutually agreed contract. This gift can be in cash, property or stock and, in return, you receive a guarantee of lifetime income through the proceeds of the trust.

More Benefits for You
You make your gift to HSSA and receive partially tax free income for life.

Your gift entitles you to an immediate charitable income tax deduction.

There are no immediate capital gains taxes if your gift is made with appreciated property.

Your gift reduces the subject to a federal estate tax and avoids probate.

Gift annuities are remarkably flexible. They allow you to name yourself or someone else as income beneficiary. Payment rates are determined at the time of setting up the agreement according to the age of the recipient and the date that payments begin. This allows you to postpone your annuity payments to a future time, such as retirement or for a child's college education. Once an annuity is established, payments are fully guaranteed for life by HSSA.

You may also increase your own income as interest rates for gift annuities are typically higher than those available from stock dividends or certificates of deposit and passbook savings.

More and more donors are considering the dvantages of charitable trusts - not only because of the tax advantages, but because it allows you to give a generous gift and receive a lifetime income at the same time.

Charitable trusts are a tax-wise way to increase your current income, while providing a generous gift for the future welfare of animals. The trust works quite simply:

The donor transfers money, stock, or other property to a trustee.

The trustee then pays the donor (or his/her designated recipient) an income for life. The trust can be set up for the lifetime of the beneficiary or for a determined number of years.

After the lifetime income payments have been made, the trustee transfers the amount left in the fund to the Humane Society of Southern Arizona for the particular purpose designated when the trust was created.

Most charitable trusts are created to provide additional lifetime income for the donor and/or the donor's spouse. The lifetime payments will depend on which kind of charitable trust the donor chooses. If it is an annuity trust, the beneficiary receives a specific sum of money each year. If it is a unitrust, the beneficiary receives a percentage of the total value of the assets in the trust as revalued each year.

Another type of charitable trust is the lead trust, which is set up for a limited amount of time during which the income generated from the trust is transferred to the Humane Society of Southern Arizona. Upon its term completion, or maturity, the principal is returned to the donor or his or her designee.

More Benefits for You
Through a charitable trust you are able to increase your income, receive a charitable contribution deduction, and avoid capital gains taxes.

If you own any low dividend stock, certificates of deposit or passbook savings, a charitable trust may be an appropriate choice. Transferring the funds to HSSA through a charitable trust may provide a higher rate of annual return than you previously had. This higher return is then paid to you and/or your beneficiaries as income in determined intervals, after which the assets can be distributed to HSSA.

In addition to lifetime income, the annuity trust and the unitrust offer a number of benefits:

• The donor receives a federal income tax deduction upon the creation of the trust.
• No capital gains tax liability is incurred upon the transfer of appreciated property to fund the trust.
• The creation of the trust reduces the property that must be administered in the donor's estate, and may result in favorable estate tax treatment.

D. CHARITABLE GIFTS OF APPRECIATED PROPERTY

Gifts of appreciated property consist of the donation of those possessions that have increased or are likely to increase in value with the passing of time. Two of these are securities and real estate-- publicly traded stocks, bonds, mutual funds, treasury bills, notes, closely held stock, commercial property, farms, personal residence or unimproved land.

Why would anyone give property rather than simply write a check? One answer is that our nation's tax laws offer special incentives for gifts of non-cash property, especially if it has increased in value since it was acquired. Cash or check may be the easiest and fastest way to make a charitable gift, but it is not necessarily the best, most efficient nor the most tax-wise way for the owner of appreciated properties.

A second reason is that a non-cash gift of appreciated property tends to be larger than the check that most of us can write to our favorite charity. It can be a gift of endowment to provide continued funding or to strengthen programs of the Humane Society of Southern Arizona. Through gift planning you may experience the satisfaction of making a substantial gift during your lifetime and beyond.

The most effective way of making a charitable gift is to plan the gift so that it achieves as many personal objectives as possible:

• Achieving an income tax deduction before December 31st.
• 
  Making a pledge or commitment to a charitable organization.
  
  
• Lowering the real cost of your gift to allow you to either make a larger gift to HSSA or simply make you feel better about your tax-wise giving.
  

SECURITIES
If your portfolio includes low-earning growth stocks that have increased in value over the years, or you have appreciated securities that you've held long term, it would be more advantageous for you to fund your gift with securities because:

1. You will receive an income tax deduction for the full market value of your gift as of the date of transfer
   
   
2. You will pay no capital gains tax on the appreciation of your asset (the difference between your cost basis and current fair market value)
   
3. You will use no cash in making a generous charitable gift.

Example: Bob and Sue purchased 100 shares of stock in 1985 at a cost of $2,000. Today the shares are worth $10,000 and pay less than 2% in annual dividends. If Bob and Sue sell the stock now they would realize an $8,000 capital gain and could owe $1,600 in federal capital gains tax at current tax rates of 20%.

In their 39.6% tax bracket, Bob and Sue will create income tax savings of $3,960 whether they give cash or securities. However, by transferring the securities to an account of the Humane Society of Southern Arizona they will also legitimately avoid capital gains tax of $1,600. That means the real cost of their $10,000 gift of appreciated securities is only $4,440. The tax savings of $5,560 means they are giving more than if they made their gift in cash.

A donor may take a deduction for the value of the appreciated asset up to 30% of adjusted gross income and can carryover any part of the gift that exceeds the 30% limit for up to 5 more years.

It's as easy as a Phone Call
How do I make a transfer of appreciated securities? The easiest way is to have your broker telephone the Humane Society of Southern Arizona and speak with the Director of Finance about the transfer of securities from your account to that of HSSA by written or telephone authorization. Your gift is effective immediately upon transfer at the fair market value on that date.

You may also deposit securities with your broker or your bank for the account of HSSA. Whatever option you choose, HSSA should be advised that the securities are being transferred and instructions are awaited. If you make an estate gift to the Humane Society that will guarantee life care for your pet survivor, you may elect to do so with a unitrust or an annuity. In either case it would be wise to consider funding the gift with appreciated securities or real estate to obtain the greatest benefits for yourself and your pet.

REAL ESTATE GIFT OPPORTUNITIES
A donor of real estate gifts can give property outright or can choose to retain rights to ownership throughout his/her life or that of surviving family members or pets.

Real estate gifts are used to increase HSSA's operational endowment and program funding. Real estate can be sold or rented in order to create revenue for the organization. Every gift of real estate property to the Humane Society of Southern Arizona helps us further pursue our mission of not allowing another adoptable animal to be euthanized simply because we lack the resources to serve the needs of an ever increasing number of abandoned animals.

Retained Life Estate
While some people are in a position to donate real estate outright to the Humane Society of Southern Arizona, others may need to continue to live there or to earn income from it. You can donate your residence or second home to HSSA and receive an immediate charitable tax deduction for the remainder value of the property (what IRS estimates as HSSA's future right in the property). This can be done while still retaining the right to reside in, use or derive earnings from the property for life.

This type of gift may be attractive to you if you are considering leaving your property to HSSA through your will, but would like to transfer the gift now to receive the income tax advantages and increase your cash flow.

Lifetime Income
Real estate can be a good asset with which to fund a lifetime income agreement. Appreciated property such as real estate or securities may be placed in a unitrust or annuity designating HSSA as the beneficiary. The trust may sell and reinvest the property, avoiding capital gains taxes, and pay a specified income to you for life. You receive an immediate charitable tax deduction upon donating assets to the trust, avoid capital gains and remove the property from your estate, thus reducing estate taxes. You and your spouse or other designated beneficiary will receive a fixed percentage of at least 5% of the net fair market value of the contributed assets as annual income for life. Upon termination of the trust, the remainder principal belongs to the Humane Society of Southern Arizona.

How to Figure Your Tax Benefits
When you make an outright gift of real property, you obtain an income tax charitable deduction equal to the property's full fair market value (if held longterm) instead of the lower cost basis. This deduction lets you reduce the cost of making the gift and frees cash that otherwise would have been used to pay for taxes, insurance and upkeep. Also, you avoid tax on the property's appreciation, the transfer isn't subject to the gift tax, and the gift reduces your taxable estate.

An Ideal Gift Medium
Because there are a number of ways to donate life insurance, people do so for a variety of purposes. In general, the main reasons are:

Life Insurance as a Funding Agent
Life insurance is one of the most viable assets with which to fund a charitable gift. It can be an "immediate" gift that can be turned into cash by the charity for current programs. It can also be a "planned" or "deferred" gift in the charity's name and upon death the proceeds are used for endowment purposes.

Life insurance policies are substantial assets, and they have become an increasingly popular form of gift among those seeking to make a meaningful difference. You can donate most kinds of policies, whether paid-up, or partially paid-up. You can even purchase a new policy with the purpose of making a charitable donation.

How Charitable Life Insurance Works
There are two ways to donate life insurance. The first one is to make the Humane Society of Southern Arizona the owner of the policy. This allows you an immediate charitable tax deduction. The second option is making HSSA the beneficiary of the policy. When you name HSSA as the beneficiary of your policy, it does not entitle you to any immediate tax savings, but you will qualify later for an estate tax charitable deduction.

By naming HSSA as the owner and beneficiary of a new policy, you can make a larger deferred gift with a much smaller investment and receive a full charitable tax donation immediately.

Memorial Gifts
Others may be encouraged to make charitable life insurance donations in honor or in memory of a loved one. Since this deferred life insurance gift will be large in comparison to the premiums paid, it becomes an attractive and motivating alternative to outright gifts of cash.

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