Give a gift. Make a difference.

You can make a gift of securities to Congregation Beth Israel at any time, during your life or at your death through a bequest or other planned gift. 

How To – While you are alive, you may sell the asset directly or contact your investment broker and ask to liquidate the securities in question and send the proceeds directly to Congregation Beth Israel, a 501c(3) designated charity. During your estate planning, include the asset in your will as a bequest or place it in a trust and your executor or trustee will carry out your wishes.

Tax Treatment – If you make the gift during your lifetime, include the value of the gift on your income tax return as a charitable deduction. For a sale of securities, the broker will notify the Internal Revenue Service (IRS) that the proceeds from the sale of assets have been sent as a gift directly to a 501c(3) charity.

A bequest means including a specific gift in your will. It allows you to direct some of your money or property to Congregation Beth Israel (CBI) or another person or entity after your death. A bequest reduces the total value of your estate for tax purposes. A bequest to CBI is one of the easiest ways to make a gift to preserve Jewish life in Charlottesville.

How To – You need a written will to make a bequest. Working with an estate attorney, include or add a sentence to your will or trust agreement specifying to whom and how much you would like to give. The amount can be either a dollar amount, a specific thing (such as real estate you own), or a percentage of your estate. You can leave assets to support general purposes or restrict them to a specific program or fund. Sample language: “I devise and bequeath $100,000 to the General Operating Fund of Congregation Beth Israel, 301 E. Jefferson St., Charlottesville, VA.” Or, “I designate 5% of my estate to the Second Century Fund at Congregation Beth Israel, 301 E. Jefferson St., Charlottesville, VA.”

Tax Treatment – A bequest removes property from your taxable estate, thereby lowering your estate’s tax liability.

A charitable gift annuity allows you to make a significant gift to a valued organization while receiving interest income during your lifetime. Charitable gift annuities may be created to produce a lifetime stream of income for one or two people – usually the donor and spouse – but could also support a disabled child during his or her lifetime.

How To – Setting up a charitable gift annuity is relatively simple and can generally be done just by filling out a form and transferring assets to fund it. It can be funded with cash, securities or real estate. Large nonprofit organizations, such as the University of Virginia, manage charitable gift annuities in house. Smaller organizations like CBI may not have the resources to manage these gift vehicles in house, instead working with an outside organization such as the National Gift Annuity Foundation (NGAF). In this case, a donor makes a contribution to NGAF, which provides the donor or named beneficiary with a fixed payment for life. Upon the death of the donor or other non-charitable beneficiary, NGAF forwards the principal of the charitable gift annuity to the charity designated by the donor.

Tax Treatment – Younger donors and donors who may have sold a business and are facing considerable capital gains taxes may benefit from using a deferred charitable gift annuity. An up-front tax deduction can help with capital gains from selling a business. And young donors who defer the annuity payments until sometime in the distant future – such as retirement – will see higher payments than if they had taken the annuity payments right away.

A charitable lead trust is a kind of irrevocable trust, which is designed to provide income to one or more charities, such as Congregation Beth Israel, for a specified period of time. At the end of the trust term, or upon the death of the donor, the remaining assets go to family members or other non-charitable beneficiaries. A charitable lead trust can reduce income tax, gift tax and estate tax. It can be structured as an annuity trust or a unitrust. An annuity trust pays out a fixed sum of money every year for a set period of time, or the life of the annuitant. A unitrust pays out a set percentage of the next asset value of the trust every year. 

How To – You work with a tax or estate advisor to create a trust. The term of the trust could be a specific number of years or your lifetime. The trust can be funded with cash, securities, or real estate, such as rental property.

Tax Treatment – There are two types of charitable lead trusts and each affords different tax benefits:

This is most often used for donors (grantors) who experience a significant income event, such as selling a business. With a grantor charitable lead trust, the donor receives an immediate income tax deduction, the charity receives income during the trust term, and the donor or another non-charitable beneficiary receives the assets after the trust term ends.

This is used to reduce gift or estate tax at the end of the trust term. In this case, the donor cannot claim a tax deduction for assets given to the trust. Instead, the trust pays taxes on the income earned from the assets and makes a large charitable gift during the term of the trust. After the trust term ends, the remaining assets are given to the non-charitable beneficiaries who face a reduced tax liability because the trust paid income taxes during the trust term.

A charitable remainder trust is an irrevocable trust that lets you donate assets to Congregation Beth Israel or another charity upon your death but, in the meantime, allows you or another person you designate to draw income from the donated assets. It can be structured to make payments for your lifetime, or for another person’s lifetime, or for a specified period of time, such as 20 years. After the death of the donor or the non-charitable beneficiary, the trust passes on the remaining assets to the charitable beneficiary named in the trust.

There are two types of charitable remainder trusts. A Charitable Remainder Annuity Trust (CRAT) pays a certain dollar amount each year to the annuitant. This amount must be at least 5% and no more than 50% of the value of the property given to fund the trust. A Charitable Remainder Unitrust (CRUT) pays a percentage of the value of the trust each year on a given date to the non-charitable beneficiaries. These payments must be at least 5% and no more than 50% of the value of the property given to fund the trust, valued annually.

How To – You work with a trust and estate attorney to draw up a legal trust document, specify the beneficiaries, and fund it with cash, property, or other assets. Upon your death or that of the other non-charitable beneficiary, the remaining assets are donated to the charity you named in your trust.

Tax Treatment – You can defer income taxes on the sale of assets given to this trust. Contributions to the trust qualify for a partial charitable deduction. Payments to the non-charitable beneficiaries are taxable.

A donor-advised fund allows you to place pre-tax money in a charitable fund that you can then direct to make grants to Congregation Beth Israel and other charities. You can take a tax deduction in the year you make the gift to the donor-advised fund but may take several years to allocate the money to your chosen charities. Different organizations offer donor-advised funds. These include nonprofit community foundations, such as the Charlottesville Area Community Foundation, as well as the charitable branches of investment companies, such as Fidelity Charitable, Vanguard Charitable, and Schwab Charitable.

How To – Contact the community foundation or charitable branch of the investment firm of your choice and open an account with them. There is often a minimum required investment, which can range from $5,000 to $20,000. You can then work with the staff of the donor-advised fund and begin to direct distributions from it.

Tax Treatment – There is no upper limit on the size of the gift you can make to a donor-advised fund, but there are limits on the size of the annual income tax deduction you can take that may change over time.

An Individual Retirement Account (IRA) is an employer-sponsored financial account that helps employees save and invest for retirement. To make a charitable gift with your IRA is simple. You just need to contact your IRA administrator for a change-of-beneficiary form or download a form from the administrator’s website. You fill out the form with the name of the intended charitable beneficiary and the intended gift amount and send it back. While a donor is never required to let a beneficiary know about an intended gift, in the case of an IRA, it is a good idea to do so because many retirement plan administrators assume no obligation to notify a charity of its designation as a gift recipient, so after a donor’s death, funds could sit in an account for years without the intended beneficiary knowing of the gift. 

If you have reached the age when you need to take Required Minimum Distributions (RMDs) from your IRA – currently, age 73 but subject to change – you can avoid paying income tax on appreciated assets in your IRA account by donating some or all of your IRA to a charity. Donations made from an IRA can meet all or part of the IRA’s required minimum distributions for the tax year. If you are 70 ½ or older, you can donate up to $105,000 (subject to change) to one or more charities directly from a taxable IRA instead of taking your RMD. This Qualified Charitable Distribution (QCD) will count toward your RMD.

How To – Let your IRA administrator know that you want to change the beneficiary of some or all of your IRA to Congregation Beth Israel or other charity. You can designate either a dollar amount or a percentage of the assets in your account. It is important to work with the administrator of your IRA to make a Qualified Charitable Distribution directly from the IRA administrator to the designated charity without touching your hands in order for your gift to stay tax free.

Tax Treatment – This method avoids income tax on the appreciated assets and therefore enables you to make a larger gift to charity than you could make if taxes were deducted. Check the current tax-free charitable donation limits as they are subject to change. This method also may reduce your Medicare payments if you are over age 73 and required to take RMDs.

You may take out a life insurance policy on yourself and name Congregation Beth Israel as a primary beneficiary. You may buy either a term life policy, which lasts for a set number of years, or a whole life policy, which lasts for your lifetime. Buying a life insurance policy allows you to make relatively small premium payments while you are alive that will secure a relatively large gift to the charitable beneficiary at your death.

How To – Contact a life insurance company that is highly ranked for financial strength by A.M. Best and buy a policy that suits your budget and provides the level of benefit you desire to provide to the named beneficiary.

Tax Treatment – An outright gift of a life insurance policy to a charitable organization during your lifetime may produce a charitable income tax deduction equal to the lesser of the policy’s face value or the donor’s investment basis in the policy. Usually, the donor’s tax basis in a policy equals the total amount of premiums paid by the donor.

You can make a gift of real estate to Congregation Beth Israel at any time, including at your death through a bequest or placing the real estate in a charitable trust.

How To – While you are alive, you may sell the real property and send the proceeds to Congregation Beth Israel, a 501c(3) charity. To make a bequest, specify the gift in your will and your executor will carry out your wishes after your death. To include real property in a charitable trust, work with a trust or estate attorney to place the property in the trust, designate the beneficiary and name the trustee.

Tax Treatment – If you make the gift while you are alive, include the value of the gift on your tax return for a charitable tax deduction. After your death, the value of this charitable gift will reduce the tax liability of your estate.

A revocable living trust allows you to place assets inside a trust, thereby removing them from your taxable estate. A revocable living trust also enables you to avoid the public probate process and keep your estate plans and assets private.

How To – A revocable living trust is a document drawn up with an attorney specializing in wills and estates. With a revocable trust, unlike an irrevocable trust, you can change this document up to the date of your death. 

Tax Treatment – Assets placed inside a revocable living trust are subject to both income and estate taxes; however, as of 2007, the Commonwealth of Virginia no longer has an estate tax.