“Change-Your-Mind” Gift Options

“If I had known I was going to live this long I would have taken better care of myself!”
– Eubie Blake, Ragtime Piano Player, 1883-1983.

Many people, in reflecting on their potential for long lives and the uncertainty of future financial needs, are understandably cautious about money matters.  They might paraphrase Eubie Blake:  “If I’m going to live a long time, I need to take better care of my money.”   That philosophy often extends to major charitable contributions.

Fortunately, a wide variety of gift techniques are available to donors who want to support important causes and institutions but feel they need to keep full control of their financial resources during life.  These “change-your-mind” gift techniques permit donors to be important philanthropists; the gifts simply occur at death. Here are five ways you can plan major contributions in ways that leave you in full control of your assets:

1.  Make a bequest.  Gifts by will are the oldest form of revocable gift arrangement – a time-honored way to “give something back” to the society in which you have lived.

2.  Include charity in your living trust.  Many donors have revocable living trusts.  It’s easy to include us as an additional beneficiary, with the same flexibility available to donors who have wills.

3.  Earmark a financial account for charity.  Generally speaking, it’s possible to leave financial  account or brokerage account proceeds to an individual or organization without making or changing a will.  You can name a death beneficiary for almost any kind of account:  savings, checking, CDs, credit union savings, etc. Ask the manager at your financial institution about the necessary paperwork for naming a beneficiary.

4.  Give IRA or pension death benefits.  Charitable organizations generally can be named as death beneficiaries of retirement savings plans.  So friends who participate in pension plans, Individual Retirement Accounts (IRAs), 401(k) plans, 403(b) plans and other qualified retirement savings plans have an opportunity to make important gifts through a simple beneficiary designation.

Naming charity as death beneficiary also may be good tax planning.  Income taxes – and possibly “death taxes” – that may come due at death are wholly avoided.  Donors should be sure that the payout of benefits to us is either a lump sum or arranged over a specific number of years.  Note: Except for IRAs, married persons will need a spousal consent form if they wish to name anyone other than the spouse as death beneficiary.

5.  Make us a life insurance beneficiary.  Life insurance, in addition to providing family protection and peace of mind, can offer a multitude of other benefits, including significant benefit for community programs.  You can keep lifetime ownership rights in a policy (the right to borrow against or cash in a life insurance policy, for example) but name us the death beneficiary.  Your estate will be entitled to a charitable deduction for the proceeds passing to us.  If you’d prefer, you can name us as contingent beneficiary of a life insurance policy.  We would receive the proceeds only if your primary beneficiary died before you.  Or you can make us the co-beneficiary and share insurance proceeds with another person.

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