Gifts That Protect Your Assets

Increased income may not be your primary objective.  Instead, you may be wondering how you will deal with some highly appreciated property or a growing family business as your needs and lifestyle change.  Will taxes consume much of the value that you have worked so hard to grow?  Will anything be left for you and your family?

There are several plans that help you keep control of your assets, or transfer them, at less cost to you and to make a gift at the same time.

Here are some of the benefits:

• You can donate your home, continue to live in it, and get a tax deduction.
• You can contribute rental property, continue to draw rents, and get a tax deduction.
• You can receive a sum of cash in return for your gift, and apply the cash towards any financial need.
• You can greatly reduce the estate and capital-gain tax cost of passing appreciating assets on to your children.

We can assist you in exploring creative ways to use those assets to benefit St. Luke's while at the same time preserving the benefits of those assets for yourself and your family.

Appreciated Property

Securities, real estate, closely held stock or tangible personal property such as jewelry, works of art, boats, etc, can be used to make a gift to St. Luke' Episcopal Church or St. Luke's Heritage Fund.  There are often several tax advantages to making these gifts.  Again, you will want to inform St. Luke's of your intent to make a gift of appreciated property to ensure that your plans can be carried out and that the St. Luke's can accept the specific property.

Benefits

• You receive an immediate income-tax deduction for the fair market value or appraised value of the property on the date of transfer, no matter what you originally paid for them.
• You pay no capital gains tax on the transfer, so long as the gift can be used by St. Luke's to carry out its mission.
• Giving appreciated property could be more beneficial than giving cash.
• In certain cases, you can use securities or property to fund a life-income gift that provides you and/or other loved ones with an income now and benefits St. Luke's in the future.
• Without using cash, you can make a gift that is beneficial to St. Luke's.

A Retained Life Estate

Often your home, vacation home, or condominium is your biggest asset.  It is possible to make a gift of such an asset and keep the right to use it, live in it or receive income from it for the rest of your (and your spouse's) life.  Capital gains, inheritance and estate taxes may be reduced and an immediate income tax deduction may be taken at the time of the gift.  You will want to inform St. Luke's of your intent to make a gift of real estate to ensure that your plans can be carried out and that the specific property can be accepted.

Benefits

• You can give us a significant asset, but retain the security of using it for the rest of your life.
• You receive an immediate income tax deduction for a portion of the appraised value of your property.
• You can terminate your life estate at any time and may receive an additional income tax deduction.

A Charitable Lead Trust

Your hard work has paid off and your assets and/or business have grown in value.  How can you preserve some of this value for your children or other heirs?  You could consider a Charitable Lead Trust.

Charitable Lead Trusts are often viewed as the opposite of a Charitable Remainder Trust.  A donor transfers property to the lead trust, which pays a percentage of the value of the trust assets, usually for a term of years.  At the end of the trust term, the remaining assets in the trust and any growth it has realized are passed to your heir(s).   Although there is no income tax deduction when you create a Charitable Lead Trust, your gift or estate tax is greatly discounted and any growth is passed to your heir(s) gift and estate tax free.  It is one of the only transfer devices currently used that can discount the value of the original assets and result in little or no taxes.  At the same time, you fulfill your charitable desires.

How It Works

• You contribute securities or other appreciating assets to a charitable lead trust.
• The trust makes fixed annual payments to St. Luke's (and any other charitable organizations you care about) for a period of time.
• When the trust terminates, the remaining principal is paid to your heirs.

Benefits

• Income payments to St. Luke's for a term reduce the ultimate tax cost of transferrng an asset to your heirs.
• The amount and term of the payments to St. Luke's or other charities can be set so as to reduce or even eliminate Federal and State estate taxes due when the principal reverts to your heirs.
• All appreciation that takes place in the trust goes tax-free to the individuals named in your trust.

A Charitable Bargain Sale

Your lifestyle is changing.  You want to make a gift to St. Luke's, but you also need cash to meet your obligations, or an assured stream of income for retirement.

How It Works

• You sell your residence or other property to St. Luke's for a price below the appraised market value - a transaction that is part charitable gift and part sale.
• St. Luke's may use the property, but usually elects to sell it and use the proceeds of the sale for the gift purposes you specified.

Benefits

• You receive an immediate income tax deduction for the discount you took from the appraised market value of your property.
• You pay no capital gains tax on the donated portion of the property.
• You can receive payment from St. Luke's in a lump sum, or in fixed installments.