A gift to charity can provide great joy and satisfaction, especially when the gift is specifically targeted to the particular philanthropic interests of the donor. For those who have close personal ties to this area, whose children and grandchildren will continue to live here, who support the continuous work of our community builders, funding an endowment in the community foundation is a positive action that continues his or her connection to our city forever.

Charitable Assets

Turn what you have into charitable good.

Outright Gift

The simplest way to make a big difference.

You can make a gift of cash, stocks, bonds, real estate, or other assets to the Lubbock Area Foundation. Most charitable gifts qualify for maximum tax advantage under federal law.

 

Gift of Real Estate

A charitable gift unearthed.

Making a charitable gift of real estate through the Lubbock Area Foundation can help you turn your property gains into community good. Gifts of real estate range from personal residences and vacation homes to rental properties, farmland, and commercially developed land — the value of which may exceed that of any other asset you own. With the help of the Foundation, you can use real estate to make a bigger charitable difference than you thought possible, avoid estate taxes, and minimize or eliminate burden placed on your heirs.

 

You may choose to give real estate outright and receive an immediate tax deduction, or retain the use of the property during your lifetime and make a planned gift to the Foundation. You may also choose to convert real estate into a stream of income for the rest of your life by establishing a Charitable Remainder Trust or Charitable Gift Annuity with Foundation (details below).   Doing this lets you transform a low-yield asset into a higher-yield, income-producing asset and claim a tax deduction for the charitable portion of the gift.

 

A gift of real estate must be professionally appraised to establish its fair market value. It is also assessed for compliance with our acceptance policies to make sure its resale will provide the appropriate value to community.

 

 

Gift of Life Insurance

Community as your beneficiary.

Life insurance provides a simple way for you to give a significant gift to charity and establish your legacy, with tax benefits that you can enjoy during your lifetime.

 

You can make a gift when life insurance is no longer needed for personal financial wealth replacement by either giving a paid-up policy or continuing to pay premiums. You may receive a number of tax benefits, including reduced estate and income taxes. And, if you choose to continue paying premiums through the Lubbock Area Foundation, you will be entitled to a charitable contributions deduction of up to 50 percent of your adjusted gross income.

 

You can replace the dollar value of an asset transferred to the Lubbock Area Foundation with a life insurance policy. Or, you can use regular payments from a Charitable Gift Annuity or Charitable Remainder Trust (details below) to establish an irrevocable life insurance trust. The trust can purchase insurance on your life to benefit your heirs. This way, you can make a gift to your community foundation and replace the value of this gift within your estate with life insurance proceeds.

 

Gift of Appreciated Stock

Turning stock market gains into community investment.

Everybody wins when you make a gift of appreciated stock to the Lubbock Area Foundation. Your gains are put to good use. Your gift of stock is reinvested in this community, and it qualifies for an immediate tax deduction based on the full market value.

Giving appreciated stock through a community foundation is popular among a range of givers — individual investors, families, entrepreneurs, and even groups of friends who have formed investment clubs.

By giving stock through the Foundation, you can avoid capital gains taxes that would be due as a result of its sale and establish a charitable fund that benefits the local causes and organizations you care about most. With gifts of appreciated stock, your stock market earnings translate into community impact, so you get a more rewarding return on your portfolio. You can set up a scholarship; support special programs for at-risk youth, senior citizens, or other people in need; address environmental concerns; or support the arts.

 

Gift of an IRA or Qualified Retirement Plan

At death, IRA and retirement plan balances are liable for estate and income taxes. These taxes can be as high as 60% or 70%. By making the Foundation a beneficiary of the balance of your retirement account assets, at your death your gift will establish a fund that supports charitable causes of your choice while reducing or avoiding these taxes to your estate.

 

Charitable Instruments

A variety of giving methods tailored to your unique situation.

Bequest by Will

A legacy of giving.

Including a charitable bequest in your will is a simple way to make a lasting gift to your community. When you make this gift through the Lubbock Area Foundation, we establish a special fund that benefits the community forever, and becomes your personal legacy of giving. You can decide to do it at any age by adding to an existing will or drafting a new one. In doing so you leave a legacy to this community, while enjoying the assets you need to maintain your current lifestyle. Plus, you are able to distribute some or all of your assets, tax free.

 

You can give cash, appreciated stocks, or other assets. Some of the most tax-efficient asset types to give through your will come from retirement plan accounts, since heirs would be taxed on the income in respect of the descendent (IRD). You can choose to give a stated dollar amount, a specific property, a percentage of your estate, the remainder after distributions to other beneficiaries, or you can make your gift contingent on certain events.

 

Charitable Gift Annuity

Income for today, a gift for tomorrow.

Giving through a Charitable Gift Annuity allows you to arrange a generous gift to our community, while providing yourself a new income source you can count on for the rest of your life.

 

We set up a contract with you that combines immediate annuity payments with a deferred charitable gift. You receive a stream of income that is fixed, regardless of market conditions. Upon your death, we set up a charitable fund on your behalf.

 

Income from your Charitable Gift Annuity may add up to more than the interest and dividends you earned from holding the assets. You can use this income to supplement your own lifestyle, or that of someone else: a sibling, a dependent parent, a friend, or a former employee. You or a loved one can start receiving annuity payments immediately, or defer them to increase your charitable income tax deduction. A portion of the income may be a tax-free return of principal, while some is taxed as ordinary income or capital gains. The amount of annuity paid and the tax deduction received depends on the age of the recipient and the current annuity rate (as established by the American Council of Gift Annuities).

 

A Charitable Gift Annuity reduces estate assets and may reduce estate taxes. Plus, it’s easier to set up than a charitable trust and is backed by the general assets of the Lubbock Area Foundation.

 

 

Charitable Remainder Trust

Planning for the future — for you and your community.

  Giving through a Charitable Remainder Trust allows you to receive income for the rest of your life, knowing that whatever remains will benefit our community.

 

You transfer assets into a trust, and the trust pays you, or a beneficiary you designate, regular income payments. Upon the beneficiary’s death or after a defined period of years, the remaining assets in the trust transfer to the Lubbock Area Foundation.

 

You may choose to receive a fixed income or one that changes with market conditions — income from the Charitable Remainder Trust you establish may add up to more than interest and dividends you earned from holding the assets. You can use it to supplement your own lifestyle or that of someone other than yourself: a sibling, a dependent parent, a friend, or a former employee. You can start receiving annuity payments immediately, or defer them to increase your charitable income tax deduction.

A portion of the income may be a tax-free return of principal, while some is taxed as ordinary income or capital gains. The amount of annuity paid and the tax deduction received depends on the age of the recipient and the current annuity rate (as established by the Internal Revenue Service).

 

You can pick one of these options for your Charitable Remainder Trust:

·        Annuity trust pays you a fixed dollar amount.

·         Standard unitrust pays you an amount equal to a fixed percentage of the net fair market of the trust and is recalculated annually.

·        Net income unitrust pays you the lesser of the fixed percentage specified by the trust agreement or actual trust income; some net income unitrusts allow you to make up deficiencies in past years.

·         Flip unitrust is a net income unitrust that converts to a standard unitrust upon a triggering event, such as the sale of an asset used to fund the trust.

 

Charitable Lead Trust

Giving back to community and your loved ones.

A Charitable Lead Trust helps you build a charitable fund with the Lubbock Area Foundation during the trust’s term. When the trust terminates, the remaining assets are transferred to you or your heirs, often with significant transfer-tax savings.

 

You transfer assets into a trust, which pays the Foundation an annual amount to build a charitable fund. During its term, the trust can be managed expertly by experienced trust professionals, which may help your trust investments grow over time. When the trust terminates, either upon your death or after a specified number of years, its final assets are transferred to those you designate; any growth in the trust passes to recipients, often with significant transfer-tax savings.

 

A Charitable Lead Trust entitles you to a number of financial benefits. It shelters investment earnings from tax, and it offers gift, estate, and generation-skipping tax benefits. For example, trust assets are removed from your estate for estate tax purposes. You may also capture future gift tax deductions. However, at the time your trust is established, you may owe gift tax on the present value of your gift to the final beneficiary.

 

You have several options when establishing your trust. You can create a Charitable Lead Trust during your life or through your will. The trust contributes to charity through the Lubbock Area Foundation — either for a number of years or for your lifetime. And, you select one of two types of Charitable Lead Trusts. A Charitable Lead Unitrust makes annual distributions of a fixed percentage of the trust assets to the charitable fund you establish. If you create a Charitable Lead Annuity Trust, the charitable fund you establish will receive a fixed dollar amount each year.

There is so much more we’d like you to know. For more information and ideas on ways to integrate your financial planning with charitable giving, ask your financial advisor or contact Kathy Stocco at kathy@lubbockareafoundation.org