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Bank and Investment Accounts

“Payable on death”(POD) or “Transfer on Death”(TOD) accounts name a beneficiary to receive the proceeds of your account upon your passing. You do not have to change your will or work with an attorney or accountant. There are no fees to arrange such a gift. You simply complete the beneficiary form given to you by the financial institution with information regarding SCSPCA. You retain complete control over the funds or assets in the account while you are living, and these gifts are completely revocable.

Will or Trust

There are several options to consider for making gifts to the SCSPCA by including them in your will or trust.  Consider the following:

• Leave a specific dollar amount or asset to SCSPCA.
• Designate a percentage of your estate to be given through your will or living trust.
• Give only the remainder, or residue, of your estate, or that which remains after bequests to loved ones have been made.

A legacy to SCSPCA may take different forms, including:

• An outright gift of cash
• Securities
• Personal property
• Real estate (real estate is accepted on a case-by-case basis with minimum valuation considerations and a written appraisal)

The following is an example of possible language to include in your will/trust:

“I give and bequeath to Second Chance SPCA, a not-for-profit corporation, located at 1700 J Avenue, Plano, TX  75074, the sum of $_______, or ___% of my estate, to be used for the accomplishment of its general purpose (or for a specific purpose as indicated)”.

You may designate your bequest in two ways:

• For the general purposes of the SCSPCA (an unrestricted bequest)
• To be used to support a particular program (a restricted bequest)

Retirement Assets

Retirement assets are one of the most beneficial gifts you can give to SCSPCA. These funds grow tax-free, until the time of withdrawal. With the innovative use of these assets, you can contribute generously to SCSPCA as well as provide for your loved ones. Many taxes on these plans can be avoided or reduced through a carefully planned charitable gift. Consider these charitable approaches:

• Outright gift through beneficiary designation – You can name SCSPCA as the beneficiary or contingent beneficiary of your retirement assets after your lifetime. When a retirement account is left to a charity, the organization does not pay any income tax whereas your heirs may pay income tax if they inherit your retirement funds. Your retirement plan’s administrator can provide a beneficiary form for you to name SCSPCA as your sole or partial beneficiary.
• Charitable remainder trust after a donor’s lifetime – You can name a trust as the ultimate beneficiary of excess or unused retirement assets. After your lifetime, the trust can provide income to heirs for a period of years, after which time the trust monies can fund charitable endeavors. Since it is a charitable trust, there is more money available to generate income for heirs.

Life Insurance
Life insurance is an asset that you can use to make gifts to SCSPCA. There are several ways to support SCSPCA with an insurance-related gift.

• Name SCSPCA as a Beneficiary – It is relatively simple to make a change to the beneficiary/beneficiaries of your insurance policy without changing your will or other aspects of your estate plan. Just ask your insurance company for a form that will allow you to list SCPCA as the beneficiary of your insurance policy.
• Donate a paid-up policy – You can transfer ownership of a paid-up life insurance policy to SCSPCA. After the transfer, SCSPCA can elect to either cash in the policy right away or keep the policy and receive the death benefit later. You would receive an immediate income tax deduction for either the cash surrender value or the basis (usually the cost), whichever is less.
• SCSPCA as Owner and Beneficiary – You can take out a policy and make SCSPCA the owner and beneficiary of the policy. Premium payments can be made by you directly to the insurance company or by SCSPCA, by way of your annual gift to the organization. Whichever way the premiums are paid, you can take an income tax deduction.

Retained Life Estate
A retained life estate is a gift plan defined by federal tax law that allows you to donate your home or farm to SCSPCA while retaining the right to live in it for the rest of your life. As the creator of a retained life estate, you irrevocably deed to SCSPCA your home or farm, but retain the right to live in it for the rest of your life, a term of years, or a combination of the two. You may also use a vacation home to create this kind of gift.
While you retain the right to live on your property, you continue to be responsible for all routine expenses, including maintenance fees, insurance, property taxes, repairs, etc. If you later decide to vacate your property, you may rent all or part of the property to someone else or sell the property in cooperation with SCSPCA.
When your retained life estate ends, SCSPCA can then use your property or the proceeds from the sale of your property for the purpose you designate. Please note that all gifts of real estate are examined on a case-by-case basis.

Real Estate
When including real estate in your will, it is important to clearly identify the address and include a legal description of the property, such as lot and block number. When we are notified that we are a beneficiary of real estate we will likely sell the asset. The executor of the estate has the real estate appraised for tax purposes, and if there is a mortgage on the property, the mortgage is paid off and SCSPCA receives the balance. Please note that all gifts of real estate are examined on a case-by-case basis.

Charitable Remainder Trust
A Charitable Remainder Trust (CRT) is a life-income arrangement that provides you and/or other beneficiaries with a stream of income for life or for a period of years. After the trust terminates, the principal, or “remainder interest,” goes to SCSPCA. Unlike other life-income arrangements, CRTs are separately invested and managed trusts. Please note that SCSPCA does not manage these trusts for donors.
This is the most flexible of life-income plans, and a powerful way for you to benefit along with your heirs and SCSPCA. You can choose to receive a variable or fixed income (beginning immediately) for life or a term of years. There is no limitation on the number of beneficiaries of a CRT.  When appreciated assets are donated to the trust, they can be sold without incurring capital gains tax, allowing the entire proceeds from the sale to be reinvested. You can receive a charitable income tax deduction in the year the gift is made, with an additional five years to carry over any unused deduction.

U.S. Savings Bonds
Although it is not possible to make a lifetime charitable gift of a savings bond without first paying the tax on the interest earned, it does make an excellent asset to bequeath to SCSPCA. Why is that? It’s because savings bonds generate “income in respect of a decedent.” That means, if you die owning them, the accumulated interest is taxed before your heirs inherit them. However, if they are left to an organization like SCSPCA, that tax is not due. We suggest that you check with your advisors about the best way to bequeath your savings bonds to SCSPCA.

 

The material presented here is intended as general educational information on the topics discussed and should not be interpreted as legal, financial or tax advice. Please seek the specific advice of your tax advisor, attorney, and/or financial planner to discuss the application of these topics to your individual situation. Thank you for your support for Second Chance SPCA !!

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