By Peggy Hoyt and the Law Offices of Hoyt & Bryan LLC
The term “planned giving” was coined over 40 years ago by Robert F. Sharpe. It contemplates a gift to a charitable organization that is made at some time in the future – usually at the death of the donor. The most common type of planned or deferred gift is an outright gift (bequest) to a charity either through a person’s will or from a trust.
Charitable organizations like the Pet Alliance of Greater Orlando rely on the kindness and philanthropy of their donors to support their many programs and accomplish their mission. Many gifts are given as current gifts – a gift of cash, real estate, securities or a vehicle that can be used today. Other gifts are deferred gifts – a gift that will occur at some point in the future, hence the idea of a planned gift.
Wills and trusts are ideal for the purpose of making a planned gift. The Pet Alliance of Greater Orlando can be named as beneficiary of a specific gift or dollar amount, or they can be the remainder beneficiary to a trust that may be created for another purpose and then when that purpose is complete, the remaining assets are distributed to the charity. A common example would be a pet trust created for the lifetime of your pets and then when the trust is complete, the balance of the trust assets would be distributed to the Pet Alliance of Greater Orlando.
Another common gift would be naming a charitable as the beneficiary of a life insurance policy or retirement plan. That way, the charity will receive the full benefit of the gift at the time of the donor’s death. With a retirement plan, the donor can use the asset during their lifetime and any remaining balance would pass to the charity. With life insurance, the donor would leverage their premium payments for a larger gift later. Retirement plans are ideal vehicles for both current and planned charitable gifts.
Irrevocable trusts are another important way that planned giving can be incorporated into a comprehensive estate plan. The most common are Charitable Remainder Trusts and Charitable Lead Trusts. Both provide a benefit to the charity – either through a current stream of income with the Charitable Lead Trust or through a remainder interest upon the termination of a Charitable Remainder Trust.
Many organizations offer Charitable Gift Annuities (CGA). A CGA is an annuity that pays a lifetime benefit to the donor and at death; the remaining annuity balance passes to the charitable organization. See more information on the different types of planned giving.
