WALLOON LAKE TRUST AND CONSERVANCY AND YOUR PERSONAL FINANCIAL PLAN
Have you considered the Walloon Lake Trust and Conservancy (WLTC) when addressing estate planning? The options available include gifts now or upon your death and include the possibility of saving on taxes and earning income during your lifetime. Your personal plan should be formulated by professionals. Here are a few possibilities to consider and discuss with your accountant or tax attorney:
- Gift Cash, Land or Appreciated Securities Now - Gifts to the WLTC are tax deductible and can remove assets from your estate that may be taxed in excess of 45% upon your death. The gift value of land and appreciated securities is the market value if held for more than one year. Taxes on long term appreciation are avoided, subject to annual limits on the charitable deduction based on your adjusted gross income.
- Your Will, or Living Trust - Designating a gift to the WLTC may reduce taxes on your estate.
- Charitable Gift Annuity - With a charitable gift annuity, you can make a gift now, receive a partial tax benefit now, and receive interest at above CD or money market rates for the rest of your life or your spouse's life on your gift. This gift may be from appreciated stock or IRA distributions, which may reduce income taxes. This annuity also removes assets from your estate. A simple, one page form will complete the gift process. Current returns (4/10/2009) for a single life annuity are 5.7% for a 70 year old and 7.1% for an 80 year old person. Upon your death, or the death of your spouse, the remainder of the annuity will go into a fund to benefit the WLTC. The manager of the assets of the Charitable Gift Annuity can be the Petoskey-Harbor Springs Area Community Foundation.
- Charitable Remainder Trust - Your tax attorney can assist you in setting up this instrument which provides you income for life and a partial tax deduction at the time of the gift. It is similar in many respects to a Charitable Gift Annuity, except that you select the trust financial manager. You can act as trustee of the trust. If the WLTC is named as beneficiary of the trust, WLTC receives the proceeds on your death or the death of your spouse. This option is appropriate for large gifts only (in escess of $300,000).
- Charitable Lead Trust - Your tax attorney can assist you in setting up this instrument which provides income to WLTC for your lifetime. Upon your death, or your spouse's death, the remainder of the trust goes to a beneficiary of your choice, including relatives. With careful planning, you can substantially reduce, or even eliminate, estate and gift taxes. Also, all appreciation in the value of the trust properties occurring after funding the trust would be completely free of gift and estate taxes. This option is appropriate for large gifts only.
- Private Foundations - You can establish a private foundation that may reduce your taxes and allow you and your family to give charitable gifts in the future to charitable organizations of our choosing. This option is appropriate for large gifts only.
- Donor Advised Funds - You may establish a Donor Advised Fund through a financial investment firm of your choice. You receive a tax deduction upon formation of the fund and you advise the investment firm regarding the recipients of the proceeds from the fund. Capital gains in the fund are tax free. Establishment of a Donor Advised Fund is an irrevocable event, however the beneficiary of the fund is at your discretion and may be changed at any time.
- Life Insurance Policy - You can name WLTC at the beneficiary or partial beneficiary of any life insurance policy that you hold. If the WLTC is given outright ownership of the life insurance policy, you generally will get an income tax charitable deduction equal to the fair market value of the policy or its cost basis, whichever is less. Furthermore, you can arrange to deduct any future premiums that may be due on your policy as you pay.
- IRA Beneficiary - You can name WLTC as a partial beneficiary of your IRA. This may reduce taxes paid by your children upon your death, as well as your income taxes in the year of the gift. WLTC receives 100% of the gift amount.
- IRA Charitable Rollover - If you own an IRA and are age 70 1/2 or over, the IRA Charitable Rollover is a smart and easy way to support the WLTC. there is no required minimum IRA Rollover for 2009, but there may be in future years. The rollover amount is not subject to income tax. Your gift is put to immediate use supporting the WLTC. This option is available for 2009, but may not be available in future years.
- Gift of Land with a Retained Life Estate - Under a life estate arrangement, you retain the right to live in or use the property for the remainder of your lifetime. Upon your death, the property is transferred to WLTC and the gift is completed. A current income tax charitable deduction is allowed for your gift based on the present value of your remainder interest.
