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Introduction
Stock
Wills
Insurance
Savings and Retirement Plans
Real Estate
Planned Giving
Other Options
Summary
INTRODUCTION
As you will see from this basic material, there are many plans available for those who intend to make donations or
bequests to the Foundation. However, we advise consulting with a personal attorney and financial advisors as this
material does not cover every opportunity due to a contributor.
STOCK
Giving securities is often more economical than giving cash. By making a
contribution of highly appreciated stock to Lifeboat Foundation, you can
claim a tax deduction for the full fair market value of the stock given
and not pay capital gains tax on the appreciated value.
Lifeboat Foundation has experience managing gifts of stock and would be
pleased to work with you on such a contribution. A contribution of
appreciated stock could produce tax advantages for you while helping Lifeboat Foundation to continue and
pioneer new frontiers in self-sustaining and space travel technologies.
If you need your appreciated securities to generate income, but would
still like to reap the tax advantages of a charitable gift and support
Lifeboat Foundation, you might consider contributing securities through a
Planned Giving
arrangement.
WILLS
Vast sums have been transferred by wills. Here
are some standard approaches to making bequests to the Foundation as part
of a Will.
NOTE: The laws in your state may vary. These examples are not intended to be
legal advice, but only suggestions. You should consult with your
personal attorney to ensure compliance with all applicable
laws.
1. Include a percentage bequest of your estate.
Example: "I give, devise, and bequeath to Lifeboat Foundation, a
non-profit organization currently located at
1638 Esmeralda Avenue, Minden, NV 89423, (or its properly constituted
successor organization), ______ percent of my estate, both real and
personal property of whatever kind and wheresoever
situated."
2. Include a residual bequest. This would cover any remainder of your
estate once you have made your specific bequests.
Example: "I give, devise, and bequeath to Lifeboat Foundation, a
non-profit organization currently located at
1638 Esmeralda Avenue, Minden, NV 89423, (or its properly constituted
successor organization), all (or ______ %) of the rest, residue and
remainder of my estate, both real and personal property of whatever kind
and wheresoever situated."
3. Include an explicit bequest to the Foundation of money or specific items
(stocks, bonds, land, or other real property).
Example: "I give, devise, and bequeath to Lifeboat Foundation, a
non-profit organization currently located at
1638 Esmeralda Avenue, Minden, NV 89423, (or its properly constituted
successor organization), the sum of ______ dollars (or describe the
specific property you intend to bequeath.)"
4. Include a contingent bequest to the Foundation based on whether one or
more named
beneficiaries do not survive you.
Example: "If any of the above named beneficiaries should pre-decease me,
I hereby bequeath his/her share of my estate to Lifeboat
Foundation, a non-profit organization currently located at
1638 Esmeralda Avenue, Minden, NV 89423, (or its properly
constituted successor organization)."
5. Include a life income bequest whereby after your death, income is
paid to another individual for his/her lifetime. After that individual’s
lifetime, the Foundation will receive the principal. This type of bequest
is often set up to provide for elderly parents, family members or
friends in special circumstances. Example: "I give, devise, and bequeath
unto ________________, all of my right and interest in the following
property, _______________, for and during his/her lifetime, and upon
his/her death, I give, devise, and bequeath said property to the
Lifeboat Foundation, a non-profit organization currently located at
1638 Esmeralda Avenue, Minden, NV 89423, (or its
properly constituted successor organization)."
6. Include a Lifeboat Endowment Fund Bequest. The Foundation's main endowment
fund, the Lifeboat Endowment Fund, is designed to generate funds for the
operating expenses of the organization in perpetuity. Bequests received
by Lifeboat will be placed in the Lifeboat Endowment Fund if the bequest is
more than $1,000, and the bequest is not donor restricted. Any of the
examples mentioned above can be modified to become a bequest designated
for an endowment fund.
Example: "I give, devise, and bequeath to Lifeboat Foundation, a
non-profit organization currently located at
1638 Esmeralda Avenue, Minden, NV 89423, (or its properly constituted
successor organization), the sum of __________ dollars for its Lifeboat
Endowment Fund."
7. Include a Supplementary Endowment Fund Bequest. This one is somewhat
more complicated in that a new endowment fund to support a specific
project such as an on-going lecture series, an annual contest prize, a
research fellowship or other educational endeavors must be approved by
the Lifeboat Board of Directors. It would be a good idea to consult with the
Lifeboat national headquarters for assistance. In addition, the Lifeboat
guidelines provide that a supplementary endowment fund for a specific
project may be established only with donated assets of $10,000 or more.
An endowment may be a "named" endowment that honors a specific
individual, in which case the initiating donation must be $50,000 or
more.
INSURANCE
Insurance has also been used as a standard method for the transfer of
wealth. There are a variety of approaches that can be considered to make
use of insurance to fund a contribution to the Foundation and several are
mentioned below. Gifts of life insurance are deductible up to 50% of
annual adjusted gross income, and there is a five-year carry-over for
any excess. (As of the time this material was prepared.) The value of
the estate or gift created by a life insurance policy is potentially
much larger than the premiums paid to create the policy.
1. You can receive an immediate income tax deduction by transferring the
ownership and changing the beneficiary status of a life insurance policy
that is now fully "paid up" to the Foundation.
2. You can make the Foundation the beneficiary or co-beneficiary of an
existing life insurance policy by contacting the insurance company that
issued the policy and completing the necessary forms required by the
company to accomplish the change.
3. You can purchase a new policy and name the Foundation as the
beneficiary. Your annual insurance payments are deductible if the
ownership and beneficiary status are transferred to the
Foundation.
SAVINGS AND RETIREMENT PLANS
Various savings and retirement plan vehicles allow you to designate the
disposition of these funds.
1. Savings accounts, certificates of deposit, as well as other banking
programs allow you to make the Foundation a joint-owner of the account with
the “right of survivorship” only.
2. You can make the Foundation the beneficiary of your pension plan, profit
sharing plan, IRA, Keogh plan, tax-sheltered annuity, or other
retirement vehicle. The correct notice or forms need to be completed in
each situation.
REAL ESTATE
Real estate is often overlooked as a possibility for charitable
contribution, but in fact it can be among the most advantageous
contribution vehicles for a donor. Personal residences, rental or
commercial property, farms and ranches, and undeveloped land are among
the possibilities for a contribution of this nature.
Here's an example of how a real estate gift can work to your advantage.
If you purchased a property for $20,000 that is now worth $100,000, you
can give this property to Lifeboat Foundation and avoid capital gains
taxes on the appreciation. At the same time, you can claim the full
$100,000 — the fair market value — as a charitable tax
deduction. You
may also qualify for estate tax benefits. Of course, making this
contribution also relieves you of maintenance costs, management concerns,
and property taxes.
Like any transaction of this nature, making a contribution of real estate
requires careful consideration. However, Lifeboat Foundation has
experience managing contributions of real estate and would be pleased to
work with you. A contribution of real estate could produce tax advantages
for you while helping Lifeboat Foundation to continue and
pioneer new frontiers in self-sustaining and space travel
technologies.
PLANNED GIVING
If you need your real property to generate income, but would still like
to reap the tax advantages of a charitable gift and support Lifeboat
Foundation, you might consider contributing real estate through a Planned
Giving arrangement.
Planned giving can provide support for Lifeboat Foundation while
realizing
significant tax savings for the donor. Many planned giving vehicles can
also provide donors with guaranteed income for life. The following is one
example of how a planned giving strategy might be used to make a
contribution to Lifeboat Foundation:
Mr. and Mrs. Smith would like to make a major contribution to support the
work of Lifeboat Foundation. However, the Smiths' financial circumstances
require that their assets continue to earn interest income to support
them in their retirement.
By creating a charitable remainder trust with Lifeboat Foundation, the
Smiths will receive guaranteed interest income for life and may claim an
income tax deduction for a substantial portion of their initial
contribution. If the Smiths set up the trust by giving appreciated
securities, they will also avoid capital gains taxes. If the Smiths
create the trust by giving real estate, they will avoid capital gains
taxes, qualify for potential estate tax benefits, and eliminate the costs
and obligations of managing a property. When both Mr. and Mrs. Smith are
deceased, the trust will be used to support the work of the Institute in
a manner designated by the Smiths.
There are many other ways of using planned giving strategies to both
support the work of Lifeboat Foundation and realize your financial
planning goals. A bequest, for example, allows the Institute to be named
as primary or partial beneficiary in a will, thereby reducing or
eliminating estate taxes after the donor's death while not affecting a
donor's financial situation while living.
In these and other circumstances, planned giving creates a "win-win"
situation for the donor and for Lifeboat Foundation.
OTHER OPTIONS
Of course, the easiest way to make a contribution to the Foundation would be to just to write a check. However, there
may be those of you who prefer to retain control of the majority of your assets until you are sure you will no longer
need them.
Trusts are legal arrangements in which property or other assets are held
by one person for the benefit of another. A trust should be drawn up
with the assistance of an attorney familiar with trust documents. By
putting assets into trusts, probate of an estate can be avoided, and
there can be considerable tax benefits, either for the person who sets
up the trust or his or her heirs.
1. Living Trusts allow all the proceeds of the trust to be distributed
outside of your estate and probate costs will be avoided. You can change
or cancel the trust at any time. Property and income can be managed
through the trust and any current gifts you wish to give to the Foundation
could be made through the trust. You can also list the Foundation as the
beneficiary or co-beneficiary of the trust.
2. Lead Trusts cannot be revoked once established. In the case of a lead
trust you place an amount of money, stock, or property into the trust.
While the trust is in effect, the Foundation receives an annual donation
based on the value of the trust. At the conclusion of the trust, the
principal passes on to your heirs without any gift or estate tax even if
the assets have appreciated in value. It is generally not recommended to
set up this type of trust with less than $100,000 in
assets.
3. Life Income Trusts come in several forms; including the Charitable
Remainder Unitrust and the Charitable Remainder Annuity Trust. You put a
specific amount of money, stocks, or property into the trust. It is
generally not recommended to set up this type of trust with less than
$100,000 in assets. These trusts are also irrevocable once established.
You will receive a set amount or a set percentage of the value of the
trust as payments each year for life, or the duration of the trust, as
income. In addition, you are entitled to an income tax deduction in the
year that you establish the trust. After your lifetime, or at the
conclusion of the trust, the principal in the trust will revert to the
Foundation.
4. A Charitable Gift Annuity is another option that can be used to
establish a fund that provides annual payments for the rest of your
life. You are entitled to a federal income tax deduction in the year in
which you make your gift. You can also create a joint charitable gift
annuity naming yourself and someone else as the annuitants to receive
income throughout both lifetimes. To receive immediate payments the
annuitant(s) must be 60 years or older at the time the trust is
established. If the annuitant(s) are 55 years or older it is possible to
establish a deferred program with payments not being received until the
retirement age.
SUMMARY
As mentioned at the beginning, there are many ways to make donations to
the Foundation. Here are some other ideas you may not have previously
considered.
1. Memorial/Honor Gifts are a way to give tribute in memory of someone
who has passed away or in honor of a person who is still living.
Birthdays, anniversaries, weddings, retirements, and other special
occasions offer opportunities where gifts could be directed to the
Foundation. The Foundation acknowledges gifts of $20 or more. If you wish to
make this type of gift be sure that the person(s) who sends
contributions also sends the pertinent information including the name
and address of the person honored or the loved ones of the person
memorialized.
2. If you are thinking about making a donation of any size to the
Foundation, be sure to check if your employer has a Matching Gift Program.
Many such programs match the employee contribution dollar for
dollar.
Hopefully this outline has provided some helpful information on the opportunities available to those considering making donations to
Lifeboat Foundation. These methods can also be considered if you wish to contribute to the Lifeboat Endowment Fund or
create a new supplemental endowment fund. The Lifeboat headquarters staff is available to assist you as you move forward with your
gift planning. Please feel free to call, or send email to
donations@lifeboat.com
in order to get any questions you may have
answered.
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