Did you know that there are several ways to make gifts that will help you maintain the benefits of an asset or to transfer certain assets to your heirs while saving on taxes? If you are concerned for your family and wondering if taxes might consume much of the value of your assets which you have worked hard to obtain, then explore the links below to see how you can protect your assets while supporting Gordon College.
By creating a lead trust which pays income to Gordon College for a few years, you can greatly reduce or eliminate potential gift and estate tax on trust assets passing to your family or heirs.
A charitable lead trust is essentially the opposite of life income gifts, such as charitable remainder trusts and charitable gift annuities. In a charitable lead trust, you transfer securities or other appreciating assets to a trust. The required minimum to fund this type of gift is $1,000,000. The trust makes annual payments to Gordon College for a period of time. When the trust terminates, the remaining principal and any additional growth in value is paid to you, your heirs, or whomever you designate.
A charitable lead trust creates a steady stream of income for a term to Gordon College, giving you the satisfaction of knowing you are furthering the mission of the College. Providing income payments to the College has the added benefit of reducing the ultimate tax cost of transferring an asset to your heirs. The amount and terms of the payments can be set to either reduce or even eliminate the transfer taxes due when the principal reverts to your heirs. All appreciation that takes places in a charitable lead trust is transferred tax-free to the individuals named in your trust. The fact that the appreciation in value of the lead trust assets is not subject to estate and gift taxes makes the lead trust a perfect gift vehicle for appreciating assets, such as a family vacation home. Your heirs will often receive more from an estate plan containing a family lead trust than they would from an outright bequest.
Your home is undoubtedly one of your greatest assets. Consider creating a retained life estate and donate your home to Gordon College. You will continue to live in and use the property while getting a tax deduction for your gift.
In a retained life estate, you transfer the title to your personal residence, farm, or vacation home to Gordon College while retaining the right to live in or use the property (including renting it out) for your life or for a term of years. Additionally you retain the responsibility for all the taxes and for the maintenance and upkeep of the property for the remainder of your life. When your life estate ends, the property passes to Gordon College.
A retained life estate allows you to contribute a significant asset to Gordon College while retaining the right to your property, ensuring there is no disruption in your living arrangements or cash flow needs. You will receive an immediate income tax deduction for the present value of the remainder interest in your home or property. Should your needs change over time, there are two options available for you. You can terminate your life estate at any time, which may allow you to receive an additional income tax deduction. Additionally, you and the College may also jointly decide to sell the property and prorate the sale proceeds. A retained life estate is an excellent way for you to gift what may be your most valuable asset to Gordon College, while at the same time preserving the benefits of it for you and your family.
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