Planned Giving through
The Arc of Indiana Legacy Society
Legacy Society members are individuals and families who have included The Arc of Indiana in their estate plans.
Through planned giving, donors can accomplish several different goals.
- Outright Gifts enable an individual to make a larger gift than they could make from ordinary income.
- Life Income Gifts provide life-long income to donor.
- Gifts that Protect Assets use estate and tax planning to provide for charity and heirs in ways that maximize the gift and/or minimize its impact on the donor’s estate.
General information about each type of planned gift is listed here. We encourage you to discuss these options with your financial planner and attorney.
Contact Alex Parker, firstname.lastname@example.org or 317-977-2375, to join others in The Arc of Indiana’s Legacy Society.
Through your gifts, you are ensuring The Arc of Indiana will be here for generations to come.
A Bequest is a gift made through a will or a living trust. It’s the most popular planned gift; the easiest to make; and costs nothing during a donor’s lifetime. A Bequest can be included in a new will or added to an existing will or living trust through a simple amendment called a codicil — often without the expense of hiring a lawyer.
A Bequest is usually a set dollar amount or percentage of an estate that goes to The Arc of Indiana after the donor’s death.
Publicly traded Appreciated Securities that a donor has owned for more than one year can be transferred to The Arc of Indiana. The Arc then sells the securities and keeps the proceeds, which can be applied to whatever purpose the donor designates. The donor gets an income tax charitable deduction based on the fair market value of the securities while also avoiding capital gains tax.
A donor can designate The Arc of Indiana as a Life Insurance policy beneficiary. When the time comes, The Arc receives the proceeds. This allows the donor to provide a large gift to benefit a nonprofit — often more than they’d be able to donate outright. The donor’s heirs benefit as well, because policy proceeds distributed to a nonprofit are exempt from estate tax.
A donor can make a Gift of Real Estate to The Arc, removing a large taxable asset from their estate and benefiting by receiving an income tax deduction equal to the appraised fair market value of the property, with no capital gains tax due on the transfer. The Arc can then sell the Gift of Real Estate or keep it to use.
Donors can gift items such as artwork, collectibles, books, equipment, or other items of tangible Personal Property. Most times, a gift will yield them a charitable deduction for the items’ fair market value (it must be professionally appraised), with no capital gains liability to the donor or organization. The Arc can either keep the property, display it, or sell it and use the proceeds.
Like a gift of life insurance, a donor can name The Arc of Indiana as the beneficiary of a portion or all of his/her IRA, 401(k), or other Retirement Plans. When the donor’s estate is settled, the amount designated passes to the nonprofit and the donor’s heirs avoid income and estate tax.
A Charitable IRA Rollover (also referred to as a QCD — a qualified charitable distribution) allows donors 70½ or older to make tax-free IRA charitable rollover gifts of up to $100,000 per year directly from their Individual Retirement Accounts to The Arc of Indiana. The funds must be transferred directly to the charity; withdrawing them first will result in a tax penalty.
Life Income Gifts
A Charitable Gift Annuity allows the donor to transfer an irrevocable gift of cash or securities to a nonprofit in exchange for a fixed income payment for life. What’s more, this gift plan entitles the donor to an immediate charitable income tax deduction. At the end of its term, the Charitable Gift Annuity balance goes to The Arc of Indiana to support its mission.
Pooled Income Fund
With a Pooled Income Fund, a donor’s gift is pooled with gifts from other donors who also support The Arc of Indiana, and then invested to pay each donor a quarterly income calculated from their share of the fund. As each participant passes away, The Arc receives a gift in the amount of that donor’s share of the fund. Donors can avoid capital gains tax by using appreciated assets for their gift.
A Charitable Remainder Unitrust is a charitable trust that pays a percentage of its principal to the donor and/or other income beneficiaries
the donor names for life, for a term of up to 20 years, or for a combination of both. Because it is revalued annually, payments may increase over time. The donor receives a charitable income tax deduction for a portion of the value of the assets placed in the trust. After the Charitable Remainder Unitrust terminates, the balance goes to The Arc of Indiana.
Remainder Annuity Trust
A Charitable Remainder Annuity Trust allows a donor to contribute appreciated assets to the trust, generate a fixed income stream, defer or eliminate gains, and reduce estate taxes. The Charitable Remainder Annuity Trust pays its beneficiaries a fixed amount based on the percentage of the initial value of the assets used to fund the trust. Payments can be made for the beneficiaries’ lifetimes, or for a term of up to 20 years, or for a combination of both. No upfront capital gains tax is applied to contributions of appreciated property to an annuity trust. After the annuity trust terminates the balance or “remainder interest” goes to The Arc of Indiana to be used as the donor designated.
Gifts That Protect Assets
Charitable Lead Trust
A Charitable Lead Trust is the reverse of a Charitable Remainder Trust. After a donor makes a gift, the Charitable Lead Trust pays income to The Arc of Indiana first, for a term of years or for the donor’s lifetime. After that, the trust assets are passed back to the donor or designated beneficiaries.
Retained Life Estate
In a Retained Life Estate, a donor transfers a property deed — a residence, vacation home, farm, etc. — to a charity, but retains the right to use (including rent out) or live in the property for life or a term of years. In exchange, the donor receives an immediate income tax deduction based on the fair market value of the property minus the present value of the retained life estate. The donor must cover any expenses and maintenance costs associated with the property during their lifetime.
Charitable Bargain Sale
In a Charitable Bargain Sale, a donor sells property to a nonprofit for an amount less than the property’s fair market value and receives a charitable tax deduction equal to the difference between the market value and the sale price. This can sometimes be more financially advantageous to the donor than selling the property, paying taxes, and then making an outright charitable gift from the proceeds of the sale.