IDEAS FOR GIVING TO MINISTRY
“Honor the Lord with your wealth. . . ." -- Proverbs 3:9 NIV
There are several ways to make gifts to ministry as part of your estate plan. All outright gifts to ministry and other charities at death provide a 100% of value estate tax charitable deduction.
Life Income Arrangements allow you to give and receive income during your lifetime through…
- Charitable Gift Annuities
- Charitable Remainder Unitrusts
Through will bequests and trust distributions you can…
- Tithe the Estate
- Give it Twice
- Equal Heirs
Through Beneficiary Designations you can set up…
- Life Insurance
- IRAs, Annuities, Retirement plans
- Transfer On Death
- Pay On Death
- Beneficiary Deeds
Life Income Arrangements
Charitable Gift Annuities
A charitable gift annuity is an arrangement in which an individual makes a gift to a charitable organization, such as a local church or the Missouri Baptist Foundation for the Future Generations Missouri Baptist Endowment, in exchange for a life income that usually begins within three months. The annuity rate is based on age, with higher rates for older individuals. Rates range from 5.7% to 12%. The rate is fixed for one or two lives and the Missouri Baptist Foundation guarantees payment. The minimum annuitant age is 50 for an immediate gift annuity through the Missouri Baptist Foundation.
Charitable Remainder Unitrust
A multipurpose trust, the charitable remainder unitrust provides income at a minimum unitrust rate of 5% to one or more individuals for life or for a term of years. At the end of the trust term, the remainder interest passes to ministry or other charity.
Potential benefits of a Charitable Remainder Unitrust:
- Bypass capital gains
- Income tax deduction
- Estate tax charitable deduction
- Increased income
- Avoid probate
- Future gifts to Baptists ministries
Who can serve as trustee of a unitrust?
Usually a corporate trustee, such as a bank or a charitable institution such as the Missouri Baptist Foundation, is used.
What type of assets can be placed into a unitrust?
A unitrust is often funded with highly appreciated stocks or real estate to avoid capital gains tax. It can also be funded with cash or tax exempt bonds.
What is the length of the trust?
A unitrust is set up for the life of one or more beneficiaries or for a term of years not to exceed 20 years.
Can a unitrust be used to benefit children or other heirs and eventually to charity?
Yes, a testamentary unitrust can be set up to pay income to a child or children for life or a term of years, and then the remainder will pass to charity. It provides a double benefit to family and charity.
(I am interested in a Charitable Remainder Unitrust. Please contact me.)
Bequests and Trust Distributions
Tithe of the Estate:
Tithing is a basic Christian stewardship tenant. Tithing the estate at the end of a lifetime devoted to Christian stewardship and service is an appropriate testimony for believers. Even the faithful lifetime tither may never have tithed on an appreciated asset such as real estate, securities, or retirement accounts.
Tithing the Estate offers a simple formula for honoring God with estate stewardship. Here's how it works: Leave a percentage of your estate, typically 10%, to the ministry of your choice. You may contact the Missouri Baptist Foundation for appropriate bequest language to ensure your wishes are accomplished through your will or trust distribution.
Give it Twice:
Giving to children and to charity sounds attractive, but is it possible to leave a significant legacy for ministry and at the same time leave an adequate inheritance for family? It is with a "Give It Twice" arrangement. "Give It Twice" is a three-step process accomplished through a unique trust arrangement.
- Designate assets to a "Give It Twice" trust arrangement during your lifetime through a will, revocable living trust, or beneficiary designations of retirement accounts. Your estate will remain fully available for your use during your lifetime and the life of your spouse.
- Children or other beneficiaries receive earnings from a "Give It Twice" charitable remainder trust created at the death from assets you designated. They receive earnings from the trust over a period of years until they receive a total equal to or greater than the original trust value.
- The designated charity, such as your church, Future Generations, or other Baptist ministries, then receives the trust, which converts to an endowment fund or an outright gift.
"Give It Twice" Benefits:
- Double the estate’s impact.
- Possible income and estate tax advantages.
- Avoid possible disadvantages of a “lump-sum" inheritance.
- The advantage of spreading the inheritance over a period of years.
- Even a modest estate can leave a significant legacy to ministry.
- Assets can be available for use during lifetime.
-or-
- A Charitable Remainder Trust with a "Give It Twice" provision can be established to provide income for life.
Click here for a personal visit to discuss a "Give It Twice" arrangement.
Equal Heirs:
Perhaps one of the simplest ways to leave gifts to ministry is to consider the ministry an Equal Heir. For example, in an estate with three heirs, charity becomes the fourth heir, and the estate is divided four ways at death.
Beneficiary Designations
A number of ways are available to leave gifts to ministries through beneficiary designations. Naming ministries as direct beneficiaries of IRAs, annuities, and retirement plans can avoid income taxes as well as reduce estate taxes.
Types of Beneficiary Designations:
- Life insurance payable to a named beneficiary(s).
- IRA, Pension Plan, or commercial annuities to named beneficiary(s).
- There are income tax considerations with these assets.)
- A P.O.D. or Pay on Death designation on bank accounts.
- A T.O.D. or Transfer on Death designation on cars, trucks, and boats.
- A Beneficiary's Deed on real estate in Missouri.
- Assets in a Revocable Living Trust or other type of trust created during lifetime.
Click here for help with sample language for making a beneficiary designation(s).
