A charitable remainder trust (CRT) allows you to make a substantial donation to charity, generate potentially higher current income, reduce estate taxes, and create substantial income tax benefits.  When you donate assets to a charity through a CRT, you transfer ownership of the assets to the trust.  You can direct the trust to pay you or your designated beneficiary an annual income for either life or a specified number of years.  Upon your death, the death of your beneficiary, or the completion of the trust's term, the trustee distributes the balance of your assets to your chosen charities.  It is recommended that you seek qualified tax and legal advice before establishing any trusts.  The following are types of trusts available that can be tailored to your specific financial needs:

• Charitable remainder annuity trust--for those who want to give to charity but still need a current fixed income.
• Charitable remainder unitrust--to help individuals offset the effects of inflation by providing payments that fluctuate with the market value of trust assets.
• Charitable remainder net-income unitrust--to help individuals defer distributions from the trust (sometimes until retirement) by allowing the trust to grow before income payments commence.

 

Planned Giving:  Areas of Opportunity

The Area of Greatest Need--Undesignated gifts are used to support the mission and future priorities of the Missouri League for Nursing.  Current projects:

• Ensure qualified nursing faculty by supporting the Missouri Leadership Institute for Nurse Educators that trains educators to become "master teachers."
• Partner with nursing students through the Missouri Leadership Council for Nursing Students, a mentoring program for students and experienced nurses.

MLN Scholarship Fund--Help aspiring nursing and health care professionals reach their goals by supporting this fund.  Scholarships are awarded annually to Missouri students attending programs with appropriate national accreditation and/or approved by the Missouri State Board of Nursing.

• We need funds to provide nursing scholarships to nursing students (90% of applicants were turned away due to lack of funding)!  Our goal is to provide 25 scholarships at $2,000 each!

Development Fund--Constant advancements in technology necessitate upgrading and purchasing new equipment.  You can help MLN maintain state-of-the-art equipment and technological services for enhanced health care education. Additionally, you can help ensure the development of new MLN products and services that will provide quality health care for Missourians.

Endowment Fund--Your gift will be placed in an investment fund of which only the earnings generated by the investment will be used to support the mission and future priorities of the MLN.

Building Fund--Upgrading our existing headquarters to promote maximum efficiency for the use of space will enhance the efforts of staff in meeting the educational and communication needs of health care professionals.  Future goals include providing additional facilities across Missouri to better meet the needs of health care professionals.  You can help ensure the achievement of this goal.

 

Charitable Lead Trusts

A charitable lead trust is essentially the reverse of a remainder trust.  An income payout is provided to the charity for a specified term while you transfer the remainder interest to your heirs.  The value of the remainder interests is reduced for gift or estate tax purposes by the value of the charity's income interest.

A lead trust can be appropriate when you and your family have little need for the current income an asset is generating but wish to transfer the asset to heirs with reduced tax consequences.  Lead trusts can be established during an individual's lifetime or can be created at death to reduce the taxable estate.  There are no minimum payout requirements with a lead trust and no specific limitations on the trust's term.

A lead trust can be established with one of two types of payout and with or without an income tax deduction for the donor at the time the trust is funded.

·        In a charitable lead annuity trust, the charity's income interest is in the form of an annuity or a fixed payout.

·        In a charitable lead unitrust, the income interest is determined based on a fixed percentage of the value of trust assets, valued annually.

Unlike a charitable remainder trust, not all lead trusts entitle you to an income tax deduction at the time the trust is established.

A grantor lead trust entitles a donor to a one-time charitable income tax deduction equal to the present value of the income stream to be paid to the charity.  In subsequent years, any income earned in the trust will be taxable to the donor with no charitable deduction.

A non-grantor lead trust does not entitle the donor to an income tax deduction.  Any income earned each year is taxable to the trust, which is then titled to offset the income by the distributions made to the charity.

 

Simplify Estate Planning by Sharing Wishes

Picture your children struggling to find a box of important papers stashed somewhere in the basement after you're gone.  While death is never an easy topic to discuss, it is important to talk with your family members and trusted advisors about your personal affairs.  While these discussions can be emotional, your loved ones will thank you for making sure important details are in order and decisions are made based on your desires.

 

The first step is to inventory your assets.  Your financial portfolio may include a variety of insurance, bank, investments, real estate, and other assets.  Providing your heirs with this information will make it easier to account for your estate.  If you are uncomfortable sharing the information with your family members, be sure to let someone you trust, like a financial advisor, accountant, or attorney, know where the information is located.  As with your financial inventory, tell your family members where important legal documents; i.e., wills, durable power of attorney, and health care power of attorney can be found.

 

Wills are the most basic estate planning documents.  Without a will your assets will be distributed according to state law at your death.  Chances are these state laws will not correspond directly with your plans for distributing your estate in terms of gifts to family and loved ones as well as charitable giving.  Designating a durable power of attorney is also critical and often overlooked when organizing your affairs.  Drafted with the help of an attorney, this document allows your designee to act on your behalf for such things as signing tax returns, transferring assets to a trust, and making other financial decisions on your behalf.  Keep in mind a durable power of attorney does not replace a will and its power lapses at your death.

 

A health care power of attorney designates an individual to make health care decisions on your behalf and in the manner you wish if you are unable to make those decisions yourself.  Once you execute the basic documents and discuss them with your family, it may be time to talk about your final arrangements.  It is important to tell your intended heirs if you have already purchased burial plots or made arrangements with a funeral home or cremation society.  Talk with your significant other and determine your joint wishes before speaking with other family members about your financial situation and intentions.

 

Sharing your plans for your estate is an important part of estate planning goals.  You will want to leave family members and loved ones prepared.  A knowledgeable financial advisor can help you make the right financial decisions to manage your estate, leaving you more time to enjoy life knowing your wishes will be carried out.  Additionally, you may want to experience the satisfaction and joy of "gifting" now.  There are many methods for providing gifts to charities you desire that will not only benefit their current operations but will also provide tax savings for you.

 

Charitable Gift Annuities

Like a charitable remainder annuity trust, a charitable gift annuity allows you to contribute assets but retain a specified income from those assets during your life or a joint life arrangement.

 

A gift annuity is an agreement in which the charity promises to pay you an income stream in exchange for your charitable gift.  A portion of the value of the gifted asset(s) is tax deductible.  Plus the assets are removed from your estate, which avoids estate taxation after your death.

 

A gift annuity provides you less flexibility than a charitable remainder trust, and a gift annuity is simpler than a charitable trust because it requires only an agreement provided by the charity.  This agreement lets you transfer your asset to the charity or have your financial consultant sell the asset on behalf of the charity.

 

Wealth Replacement Trust

By directing a portion of the tax savings and/or additional income generated by your charitable gift to the acquisition of life insurance, which can replace the wealth donated to charity, you can donate your assets to charity and still retain a portion to be available for your heirs.  The life insurance should be owned outside of your taxable estate; i.e., by children or by an irrevocable life insurance trust (sometimes called a "wealth replacement trust").

 

As long as your children or the irrevocable trust own the policy, the insurance proceeds will not be included in your estate. Since the proceeds will avoid estate taxes, the net assets your heirs receive will generally be greater than they would be by simply leaving them the original wealth.

 

Essentials in Estate Planning

A Will--At your death, a will tells your personal representative how to distribute your assets to other people or to a charity.  Without a will, the laws of the state where you reside determine how your assets are distributed.  (NOTE:  If you are considering a charitable gift, think of the advantages of designating it by your will during your lifetime-the bequest is private, changeable at any time, and does not deprive your assets or income you may need or want.)

 

Power of Attorney--A simple or general power of attorney permits the holder of the power to act on behalf of an individual for a time-limited period or may be a limited power of attorney authorizing power for specific activities.  A durable power of attorney permits the holder to act on behalf of an individual upon incompetence of the grantor.

 

Living Will or Health Care Proxy--A living will allows you to articulate your beliefs on life-sustaining measures and a health care proxy allows you to name a trusted individual to make health care decisions for you if you are unable to do so.  The health care proxy is used only for medical purposes.

 

Revocable Living Trust--an important part of your estate plan.  Since it is established when you are living, you can change the terms of the trust partly or completely during your lifetime.  Assets in the trust are not part of your will, and they will be transferred according to the instructions in the trust document.

 

Donation Form 

 

 

What to Give

Gifts of Cash--The simplest way to give.  You can deduct a cash gift for income tax purposes.  The Missouri League for Nursing will provide written confirmation for cash gifts for your income tax reporting.

 

Gifts of Securities--Gifts of stock allow you to deduct the increased value of the stock and reduce or avoid "capital gains" on the increased value.  Consult an attorney, tax professional, or investment professional for determining the advantages of donating securities.

 

Gifts of Life Insurance--You can donate a life insurance policy to the Missouri League for Nursing or simply name the Missouri League for Nursing as the beneficiary.  If you donate a paid-up policy, you will receive an income tax deduction to the lesser of the cash value of the policy or the total premiums paid.  To qualify for the charitable contribution deduction of the gift of an existing policy, you must name MLN as the owner and beneficiary.

 

Gifts of Real Estate--If you donate property that is fully paid for and has appreciated in value, you can deduct the fair market value of your gift, avoid all capital gains taxes, and remove the asset from your taxable estate.  You can transfer the deed now and keep the right to use the property for your (and your spouse's) lifetime.

 

Gifts of Retirement Plan Assets--This will allow you to avoid estate taxes and preserve more of your estate for the people and organizations that mean the most to you.  Your account can pass directly to a charitable organization as your beneficiary, or it can be transferred to a deferred giving arrangement that will pay for life to a family member, after which the remaining assets pass to the organization.  You might even consider a deferred gift that is designed to pay a life income to yourself with the remaining assets passing to the organization.

 

Bequests

Leave your legacy by making a gift in your will to the MLN Charitable Trust.  Be as clear as possible in describing to your attorney what you want to be given and to whom when preparing your will.  Here are sample ways to make a bequest:

• Specific bequest--a specific item to a specific beneficiary.
• General bequest--usually a gift of a stated sum of money (Note:  If there is not enough cash in the estate to meet the bequest, other assets must be sold to meet the cash bequest.)
• Contingent bequest--made on condition that a certain event occurs before distribution to the beneficiary.  Also appropriate if you want to name a secondary beneficiary in case the primary beneficiary does not survive you.
• Residuary bequest--a gift of all the "remainder" of your assets after all other bequests, debts, and taxes have been paid.  (You may provide for this according to percentages of the remainder rather than specifying a dollar amount to ensure that your beneficiaries receive the proportions you desire.)

The previous items can apply in cases of bequests to individual heirs or to charitable organizations.  The following items are special considerations when you plan a charitable bequest to help support our mission.

• Unrestricted bequest--a gift for our general purposes, to be used at the discretion of our governing board.  A gift like this allows us to determine the wisest and most pressing need for the funds received.
• Restricted bequest--allows you to specify how the funds are to be used.  If you have a special purpose or project in mind, please consult with us before you make your will to be certain your intent can be carried out.
• Honorary or memorial bequest--a gift given "in honor of" or "in memory" of someone.  We are pleased to honor your bequests and have many ways to grant appropriate recognition.
• Endowed bequest--allows you to restrict the principal of your gift and allows us to hold the funds permanently and use only the investment income they generate.  An endowment given in this manner means that your gift can continue giving indefinitely.