Planned Giving

Even if you do not consider your personal wealth to be substantial enough to count as an "estate", having a will is crucial. Not only does your will specify what you would like to happen with your property and funds, but also how you may want to be buried, who will look after your children or pets, or any other obligations you may have.

Seven out of ten people die without a will. Many of these people simply underestimate the value of their property or estate, or think it is just too complicated. While it is recommended that you consult with an attorney, writing a will can be as simple or as complicated as you'd like it to be. And most importantly, having a will will give you peace of mind.

4 Simple ways to support the VYCC:
Bequests Life Insurance Retirement Plans Charitable Gift Annuities

Have you found yourself wanting to make a substantial gift, but just not having the funds in your checking account to match your philanthropic wishes? Consider supporting the VYCC by simply writing a simple bequest in your will, naming the VYCC as a beneficiary of your life insurance or retirement plan benefits.

Bequests
Bequests are so common that charities now receive more money from bequests than from corporations. And, gifts from bequests equal gifts from foundations. Bequests are a simple, effective way to benefit the VYCC beyond your life.

What is a charitable bequest?
Simply, a charitable bequest is something left to a charity in a will. Anyone can make a bequest; all that is required is that you are alive and of sound mind. Bequests are revocable during the life of the donor, meaning that you can change your mind about it.

Tax Benefits of Bequests
All property left to a qualified charitable organization, like the Vermont Youth Conservation Corps, is deducted from the donor's estate before the federal estate tax is calculated.

Kinds of Bequests

A. Specific Bequest
A specific bequest designates a fixed dollar amount, or specific property to the VYCC. For instance, you may leave your car to the VYCC, or 30 shares of your General Electric stock, or $10,000 from your savings account. You may also name the Vermont Youth Conservation Corps to receive a stated percentage of your estate. To make this kind of bequest, you could use the language below:
"I give and bequeath __ _(specific amount, item or % of my gross estate) to the Vermont Youth Conservation Corps, a Vermont non-profit organization, located in Richmond, Vermont, for its general youth development and conservation purposes."

B. Residual Bequests
You can designate the Vermont Youth Conservation Corps to receive all or a portion of the remainder of your estate once all specific bequests have been satisfied. For instance, you may want your children to benefit, but would like to remember the VYCC as well. In this case you could designate your two children to each receive 33% of your estate, and for the VYCC to receive the remainder. Sample language:
"The rest, residue and remainder of my estate, both real and personal, wherever situated, I give and bequeath to the Vermont Youth Conservation Corps, located in Waterbury, Vermont, for its general youth development and conservation purposes."

C. Contingent Bequests
Individuals often want assets to be left to family or friends (who would be primary beneficiaries in this case). However, it is important to name a contingent beneficiary to receive assets should your primary beneficiaries not survive you. An example might be a couple without children who have elderly parents. They want to ensure their parents are well cared for if they die suddenly, but it is most likely that their parents will die before the couple. In this case, the parents could be the primary beneficiaries and the Vermont Youth Conservation Corps could be the contingent beneficiary. Suggested language might include:
"If any of the above-named beneficiaries should predecease me, I hereby bequeath his or her share to the Vermont Youth Conservation Corps, located in Waterbury, Vermont, to be used for its general purposes."

Great Bequest Stories!
One of the oldest bequests was given by Ben Franklin in 1790. He left the equivalent of $4000 to the state of Pennsylvania and the city of Philadelphia . . . on the condition that it not be touched for 200 years. The 200 years was up in 1990 and the bequest was worth $2.3 million! More recently, an 84-year-old woman in Tennessee left her church a bequest. She had never made more than $3000 a year, and had been living on Social Security and the income from her vegetable garden. The value of her bequest came from her land and two antique quilts . . . a total of $50,000.

How do I establish a bequest?
It is imperative that anyone considering his or her estate plan seeks the advice of a competent attorney before executing a will or living trust. If the person owns real estate or other assets of uncertain value, that property should be appraised in order to assess the potential tax liability the estate will face. Many heirs have experienced unnecessary litigation expenses or unnecessarily high taxes because a donor failed to do adequate estate planning. Estate plans should be reviewed regularly so that changes in estate and tax laws or changes in a family's circumstances can be adequately taken into account.

Life Insurance
There are several ways to use life insurance as a method of supporting the Vermont Youth Conservation Corps. Whichever method you choose, always be sure to consult with a financial advisor first.

A. Gift of an Existing Life Insurance Policy
You may have a life insurance policy on which you have been paying premiums for many years. But you now find yourself in the position of not needing the policy any longer. By irrevocably making the VYCC the owner and beneficiary of a life insurance policy, you have the potential to make a substantial future gift for the cost of the premiums on the policy. If the policy is a whole life or other "permanent" insurance policy with cash value at the time of the transfer to the VYCC, you will receive an immediate income tax deduction, usually equal to the policy's cash surrender value (less outstanding policy loans). To make a gift in this way, simply obtain "change of beneficiary" and "change of ownership" forms from your life insurance company. Complete them to designate the Vermont Youth Conservation Corps as both the new owner and new beneficiary. Your insurance company should advise you of the fair market value of the policy for your income tax deduction.

B. Gift of a New Life Insurance Policy
Another option is to purchase a new policy with the Vermont Youth Conservation Corps named as both owner and beneficiary. Premium payments you make each year would be tax-deductible for you.

C. Naming the VYCC Beneficiary of a Life Insurance Policy
Should you have a life insurance policy on which you have been making payments, you can make the Vermont Youth Conservation Corps a beneficiary of the policy while you continue to retain ownership of the policy. This method of supporting the VYCC is revocable. Such a gift would not generate income tax benefits, but would avoid estate tax on the insurance death benefit. Just ask your insurance company for a "change of beneficiary" form and fill in the Vermont Youth Conservation Corps as beneficiary.

Retirement Plan Benefits
Another simple way to implement your philanthropic wishes is to consider naming the Vermont Youth Conservation Corps a beneficiary of your retirement plan. Attracted to the tax-deductible contributions, many individuals have amassed significant wealth in their pension plans and individual retirement accounts. Income tax-deferred retirement accounts allow assets to grow on a tax-deferred basis, however the owner is taxed on the withdrawals at his/her income tax bracket at the time that withdrawals begin.

Tax benefits of using your retirement plan benefits as a giving tool
The "pro" of using tax-deferred retirement accounts to increase your savings is balanced by the often significant tax liability the owner incurs in the future. These taxes may come due either in the account owner's lifetime (as income tax) or after death. If, after death, the retirement account benefits are paid to anyone but the account owner's spouse, those benefits may be subject to estate taxation as well (if the owner's estate is above a certain value). This combined income tax and estate tax may be as high as 75%. Instead, leaving tax-deferred retirement accounts to charity at death allows the owner to transfer these assets without incurring any taxation. Account owners can also designate the Vermont Youth Conservation Corps for a percentage of the assets left in the plan at the time of death.

How do I leave my retirement account to charity?
Seeking the advice of your financial advisor is always recommended before making significant changes to your retirement accounts. Realize that by naming a charity the beneficiary of a retirement plan, those benefits would not pass to children. One can designate the VYCC as either a primary or contingent (secondary) beneficiary of one or more retirement accounts.
If an account owner wishes to pass the account on without having it be taxed . . . he or she may designate the VYCC as the primary beneficiary. This means that the account will pass directly to the VYCC at the owner's death, not to a spouse or child.
If both spouses wish to use their retirement accounts to benefit the Vermont Youth Conservation Corps after both spouses die . . . they can both name the VYCC as the contingent beneficiary of their retirement accounts. This means that when the first spouse dies, that spouse's retirement account will pass to the living spouse. The living spouse will incur income tax but not estate tax. When the second spouse dies, the accounts will pass to the VYCC without any taxation.
Alternatively, you may also designate the Vermont Youth Conservation Corps for a percentage of the assets that remain in the plan at your death.

What is my next step?
Contact your plan administrator for a change of beneficiary form (or the financial institution where the account is housed). Be sure to completely fill out the form, indicating whether you wish to name a contingent (secondary) beneficiary. If you name the Vermont Youth Conservation Corps as the primary beneficiary, no contingent beneficiary needs to be named. Then simply return the form to the financial institution or plan administrator for processing.

Charitable Gift Annuity
Perhaps you would like to make a significant gift to the Vermont Youth Conservation Corps, but you still want income throughout your life. A charitable gift annuity is a gift method that allows you to fulfill your philanthropic wish without losing the income from the assets you choose to give. Even if you have never heard of a charitable gift annuity, rest assured that they are easily understood and inexpensive to establish.

What is a Charitable Gift Annuity?
Simply put, a charitable gift annuity is a legal contract between you and a charity. In exchange for your gift, the charity promises to pay you a fixed income for the rest of your life. You can choose between a "current gift annuity" for which payments begin immediately, or a "deferred payment gift annuity" for which payments begin at some future date.

Benefits of Establishing a Charitable Gift Annuity
· For individuals who have maxed out the payments they can make to their retirement plans, charitable gift annuities offer another way to ensure future income.
· The establishment of a charitable gift annuity results in an immediate income tax deduction.
· A portion of your charitable gift annuity payments is not subject to tax.
· In a down market with low interest rates, charitable gift annuities offer the attraction of a higher level of dependable income.

How Does the Vermont Youth Conservation Corps Offer Charitable Gift Annuities?
The Vermont Youth Conservation Corps partners with the highly regarded Vermont Community Foundation to offer charitable gift annuities that benefit the VYCC endowment. To establish a charitable gift annuity with the VYCC, a donor makes a gift in excess of $10,000 to the Vermont Community Foundation (VCF). The VCF invests the full amount of their gift, and makes payments to the donor for life. At the donor's passing, the remainder of the original gift will be permanently set aside in the Vermont Youth Conservation Corps' endowment to benefit the VYCC's youth development and conservation programs for perpetuity.

The Vermont Community Foundation makes establishing a charitable gift annuity easy. Donors complete a one-page application and return it to the VCF along with their gift. The VCF issues the gift annuity contract and provides donors with all the information necessary to properly handle both their gift and annuity income on their income tax returns. No attorneys or accountants are necessary, although you are always encouraged to consult with your own financial advisor.

Can I establish a gift annuity to benefit my spouse, partner or family member too?
Yes. Annuitants (the people who will receive the annuity income) do not have to be related. The age of both annuitants will be considered in offering the annuity and determining the date payments will begin.
Charitable gift annuities are also a creative way to provide extra income to a parent or sibling, for instance, while also benefiting the Vermont Youth Conservation Corps.

How old do I have to be to establish a charitable gift annuity?
If you are over 60 years of age, you may elect either a current gift annuity (payments begin immediately) or a deferred gift annuity (payments begin at a later date). Donors younger than 60 years will be offered deferred gift annuities. In this case, payments would be scheduled to begin after the youngest beneficiary has turned 60.

Can I estimate how much my annuity income may be?
The Vermont Community Foundation offers payout rates up to the maximum rates suggested by the American Council on Gift Annuities. Rates vary from 4.9 to 12%, depending on the age of the annuitant. Please feel free to view a schedule of rates at: www.acga-web.org

Funding a charitable gift annuity with appreciated property
You may choose to fund your charitable gift annuity with appreciated securities, real estate, valuable personal property or life insurance policies with cash values. Should the appreciated property be acceptable under the Vermont Community Foundation's gift acceptance policy, this is an excellent opportunity to turn an asset into income.

Contact:
Thomas Hark, President at 802.434.3969x100, Vermont Community Foundation Senior Philanthropic Adviser Tom Smith at 802-388-3355 to discuss this option further.

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