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For many donors, an outright gift is not the best means of achieving their philanthropic or estate-planning goals. Carefully planned gifts can offer significant estate-tax and income benefits, while at the same time allowing donors to make larger gifts to the theatre than would otherwise be possible. Below are a few examples of how you can create a legacy of support for many years to come.
Wills
From the beginning, North Carolina Dance Theatre’s tradition of excellence has relied greatly on friends who have provided for the theatre in their wills. Whether you wish to memorialize a loved one, provide financial support for qualified students, or commission a new work, a bequest can achieve your goals and associate you with the theatre forever. Bequests can take various forms and may be restricted or unrestricted. Your will provides instructions on the disposition of your estate to loved ones and other beneficiaries. By law, gifts to charitable organizations may qualify for a 100-percent charitable deduction and reduce estate taxes heirs must pay. Because individual and family circumstances change, wills should be reviewed every five years.
In your will, you may specify gift amounts, percentages or transfers of specific assets to beneficiaries, such as cash, securities, or real or personal property. You may list a charity as a beneficiary or as a contingent beneficiary.
If you include North Carolina Dance Theatre in your will, please send a file copy of the portion of the will that relates to your charitable gift. This enables Dance Theatre to recognize you during your lifetime and to make certain your wishes are clearly understood, especially if your gift is intended for a specific purpose.
Specific bequests designate that Dance Theatre is to receive a specific dollar amount or a specific piece of property. A residuary bequest is used to give Dance Theatre all or a portion of an owner's property, after all debts, taxes, expenses and other bequests have been paid. A bequest can be expressed as a percentage of the estate or of the residuary estate.
Contingent bequest will ensure that property passes to Dance Theatre if the donor's primary beneficiaries do not survive him or her.
Charitable bequest can also be arranged to provide income for a beneficiary by directing that the bequest be used to establish a charitable remainder trust, a charitable gift annuity or be invested in a pooled income fund. If such a gift is made by will, the principal will pass to Dance Theatre only after the donor and the life income beneficiary have died.
Charitable Remainder Trusts
Charitable remainder unitrusts and charitable remainder annuity trusts may be created during one's lifetime or by will.
A donor irrevocably transfers property (cash, securities, real estate) to Dance Theatre as trustee. Dance Theatre will then, in turn, pay to you and/or another named beneficiary either a percentage of the trust principal or a fixed dollar amount for life or a term of years.
Unitrust income will fluctuate with ordinary conditions. Annuity trust income is fixed at the date of the gift and never changes. At the death of the income beneficiaries or at the end of the term, the trust ends and the principal is made available for the purposes that the donor had previously determined. A contribution to establish a unitrust or annuity trust provides an immediate charitable contribution deduction for federal and state income tax purposes. A gift of long-term appreciated property avoids capital gains tax, and there are also estate tax advantages. Because of the various tax benefits and the possibility of reinvestment of assets at a higher yield, spendable income may be more than before the gift was made.
Estate Planning
Estate planning allows individuals to review their assets, assess allocation and diversification, and consider various strategies. With estate planning, individuals can minimize taxes, increase income, and maximize assets for heirs and charitable organizations. A charitable gift may actually increase assets for you and your family, minimize taxes and provide a legacy to Dance Theatre. Your adviser will help determine tax strategies and identify which assets are best suited for increasing life income, leavings gifts for loved ones and making a charitable gift.
Retirement plan assets (RPAs) and individual retirement accounts (IRAs) often face double taxation. Not only are these assets subject to estate transfer taxes, but the recipient also must pay income taxes on the amount received. Leaving retirement plan assets to a charitable organization may generate life income for a donor or beneficiaries, avoid double taxation for heirs and provide a special tax-wise gift to Dance Theatre.
Insurance Gift
The insurance gift, with the Dance Theatre being named as primary or contingent beneficiary, is a popular gift. There are many ways in which life insurance policies can be used to make a gift to Dance Theatre. All provide an immediate income tax deduction and may enable the donor to make a much larger gift than might otherwise be possible.
The most direct and simple way of making a gift of life insurance is to name the Dance Theatre as owner and beneficiary of the existing policy. A donor receives an income tax deduction for the full cash surrender or paid up value of the policy. Any further premiums paid on such a policy which has been given to Dance Theatre are fully deductible.
Life insurance may also be used to replace the value of an asset which has been given to NC Dance Theatre. A donor may use the tax savings produced by the charitable deduction to pay the premiums on a life insurance policy. Such an arrangement can assure that the financial security of the donor's heirs will be preserved.
Deferred Payment Gift Annuity
The deferred payment gift annuity involves the current transfer of cash, marketable securities, or other assets to NC Dance Theatre. In exchange, Dance Theatre agrees to pay the donor an annuity starting at a future date, usually at the donor's retirement. The gift can consist of a single transfer, a series of transfers, or periodic transfers to the plan in high-income years.
The deferred payment gift annuity allows the donor to save income taxes now, provide for income in later years, and make an important contribution to the  theatre. Since you postpone your guaranteed payments until a date you choose, the interest on the fund will compound, and the future amount you receive will reflect this.
More Information
For further information about items mentioned above or to explore other ways of giving to North Carolina Dance Theatre, contact the Development Office at 704.372.0101 x113 or the Greater Charlotte Cultural Trust at 704.973.4500. |
