Giving to Baptist Homes (Part Two)
From its beginning, Baptist Homes & Healthcare Ministries (BHHM) has been supported by donors who believe in and support the care for the aged. We continue our review of donor giving options to BHHM. This month, we look at planned giving. Most of these features require professional assistance such as an estate-planning attorney, planned giving consultant, or insurance underwriter. Planned giving can be offered in these ways:
- Bequest and estate planning
Estate planning is the process of arranging how your assets and medical care will be handled after you die or become incapacitated. It involves creating legal documents like wills, trusts, and powers of attorney. Estate planning and philanthropy are connected because you can use your estate plan to support charitable causes. This can help you leave a legacy, support your values, and potentially save taxes. Estate planning may also allow a donor to make a larger gift than possible during their lifetime.
- Life insurance beneficiary
Donors may use life insurance policies to support Baptist Homes by making us a beneficiary to the policy. It is a simple way to make a significant future gift. There is no current cost to the donor and the beneficiary can be changed if life circumstances change.
- Charitable gift annuities
A charitable gift annuity (CGA) is a lifelong contract where a donation is made to BHHM in exchange for fixed income payments. The CGA can be funded with cash donations, securities, or gifts of personal property. BHHM pays the donor a fixed income for life, based on age at the time of the gift, life expectancy, and whether there are one or two beneficiaries. Donors may also be eligible to take a tax deduction at the time of the original gift. A portion of the payments the donor receives may also be tax-free for a period of time. At the end of the donor’s life — or the second donor’s life if the CGA is arranged for two people — BHHM is entitled to the remainder of the gift. CGAs support Baptist Homes while providing donors an income.
- Retirement account designations
A retirement account beneficiary designation specifies who will receive assets from a retirement account after the account owner dies. Beneficiary designations override any instructions in a will. There can be levels of beneficiaries. A primary beneficiary inherits the account after the owner’s death. A contingent beneficiary inherits the account if the primary beneficiary dies before the owner. Subsequent beneficiaries inherit the account if the primary or contingent beneficiary dies. Retirement account owners may also designate equal shares to multiple beneficiaries and customize how assets are distributed to them. It is good to review your beneficiary designations annually or after major life changes.
- Charitable remainder trusts
A charitable remainder trust (CRT) is a tax-exempt trust that allows donors to donate assets to charity while receiving income for life or a set period. How does it work? The donor places assets into an irrevocable trust. The trust pays the donor or a beneficiary a fixed amount or percentage of the trust’s income each year. At the end of the trust term, the remaining assets go to Baptist Homes. CRTs can be funded with cash, stocks, bonds, real estate, and other assets. The CRT benefits donors by allowing them to receive an immediate charitable deduction and avoid paying taxes on capital gains when they sell assets in the trust. Donors can receive a reliable income for life or a set period.
By Nick Davis, Director of Advancement
