Randolph-Macon Academy is privileged to have numerous alumni and friends who make gifts to support the school while planning for their own future. Their generosity commemorates loved ones, celebrates special times at R-MA, or culminates a life's work. The gift plans they use to create their legacies are tax-wise tools that yield significant immediate and long-term benefits.
If you have included the Academy in your estate plans, we sincerely hope you will share those plans with the school. If you have been considering such a step, we hope you will consult with your family and professional advisers. Please select any of the giving vehicles below to learn more.
Should you have questions or if you would like to discuss any of these vehicles further, please contact Jay Smith, Major Gifts and Planned Giving Officer, at email@example.com or (540) 636-5343.
You designate our organization as the beneficiary of your asset by will, trust, or other instrument.
Benefits of Your Bequest
• Receive estate tax charitable deduction.
• Lessen the burden of taxes on your family.
• Leave a lasting legacy.
How Do You Make a Bequest?
A bequest is one of the easiest gifts to make. With the help of a financial adviser, you can include language in your will or trust specifying a gift to be made to family, friends, or a charity as part of your estate plan.
Your Bequest Options
A bequest may be made in several ways:
• Gift of a percentage of your estate
• Gift of a specific dollar amount or asset
• Gift from the balance or residue of your estate
Making a Bequest of Your Retirement Assets
A retirement asset, such as an IRA account, makes an excellent bequest to us. If the IRA were given to your family, much of the value may be lost through estate and income taxes. By designating R-MA as the beneficiary of all or part of your IRA (using a beneficiary designation form provided by your custodian), the full value of the gift is transferred tax-free at your death and your estate receives an estate tax charitable deduction.
You transfer your cash or appreciated property to R-MA in exchange for our promise to pay you fixed income (with rates based on your age) for the rest of your life.
How It Works
A charitable gift annuity is a contract between you and our organization.
1. You transfer property to us. In exchange, we pay you fixed income for life.
2. The fixed income can be quite high depending on your age.
3. A portion of your income stream may even be tax-free. You will receive a charitable deduction for your gift and the satisfaction of furthering our mission.
Types of Assets You May Give
• If you decide to fund your gift annuity with cash, a significant portion of the annuity income will be tax-free.
• You may make a gift of your appreciated securities to fund a gift annuity and avoid a portion of the capital gains tax.
Start Receiving Payments Now with a Current Gift Annuity
If you desire current income, you may transfer property in exchange for our promise to pay you fixed income beginning as early as this year. You will receive a current income tax charitable deduction for the value of your gift to R-MA.
Deferred Gift Annuity for Income at Future Date
Perhaps you are not ready to begin receiving income until a future date, such as when you retire. You can establish a deferred gift annuity, receive a current charitable income tax deduction and receive payments at a designated future time. Best of all, because you deferred your payments, your annual payment will be higher than with a current annuity. Contact us about flexible date options for your future income.
You transfer your cash or appreciated property to fund a charitable trust. The trust sells your property tax-free and provides you with income for life or a term of years.
Benefits of a Charitable Remainder Unitrust Gift
• Income for life, lives, or a term of years.
• Avoid capital gains on the sale of your appreciated assets.
• Charitable income tax deduction for remainder portion of your gift.
• Future legacy gift to our school.
Charitable Remainder Unitrust for Income
A charitable remainder unitrust pays you income that reflects trust investments. There is the potential that your income could increase over time with growth in the trust.
How to Select the Right Unitrust Payout for You
There are several unitrust payout options to meet your needs:
• The standard unitrust pays out a percentage of the trust assets each year.
• Another payout option used commonly for real estate permits the trust to sell property tax-free and then begin paying you income after the property has been sold.
You transfer your cash or appreciated property to fund a charitable trust. The trust sells your property tax-free and provides you with fixed income for life or a term of years.
Benefits of a Trust Gift
• Fixed income for life, lives, or term of years.
• Avoid capital gains tax on the sale of your appreciated assets.
• Charitable income tax deduction for a portion of your gift.
Charitable Remainder Annuity Trust for Fixed Income
If you are tired of riding the fluctuating stock market and want a fixed income, a charitable remainder annuity trust may provide you with the stability you desire. A charitable remainder annuity trust pays out a fixed amount each year based on the value of the property at the time it is gifted.
You transfer your cash or property to fund a lead trust that makes gifts to us for a number of years. You receive a charitable deduction for the gift. Your family receives the remainder at substantial tax savings.
How It Works
1. You make a contribution of your property to fund a trust that pays our organization income for a number of years.
2. You receive a gift or estate tax deduction at the time of your gift.
3. After a period of time, your family receives the trust assets plus any additional growth in value.
Zero Tax Plan
It is even possible to set up a lead trust that will allow you to transfer assets to your family with zero transfer taxes. The IRS assumes that a lead trust is only earning at the current low federal rate. If the actual investments of the trust produce a higher return than the payments made to the charity over the term of the trust, then the full value of the trust may be transferred to family with zero gift tax.
FLP/Lead Trust Plan
To discount your gift to family even more, you may consider first transferring your real estate or other assets into a family limited partnership (FLP) that will fund your lead trust. The combination of the FLP, the lead trust, and a gift exemption can permit the lead trust to pay income to R-MA for a number of years and potentially transfer substantial assets tax-free to your family.
Increasing Payment Lead Trust
With increased volatility in the stock market, you may also want to consider creating a lead trust that makes fixed payments of increasing amounts to R-MA over time. Because the payments to us are fixed, your family ultimately benefits from any growth in the trust. Low payouts in early years allows the trust to grow, thus allowing protection should the economy produce below-average returns in the future.
If you give a portion of your property to R-MA to fund a charitable remainder trust, when the entire property sells you receive cash and income for life.
How a Sale and Unitrust Works
1. You give a portion of your asset.
2. The asset is sold, you receive cash and the rest goes to fund your charitable trust.
3. The trust will provide you with income for the rest of your life.
4. You receive a charitable deduction this year to offset your tax on the sale.
Benefits of a Sale and Unitrust
• You get the cash you need to purchase another residence, travel or meet your daily needs.
• The unitrust provides you with income for the rest of your life and future retirement.
• The unitrust deduction gives you valuable tax savings that may reduce your tax bill this year.
• When you pass away, the remaining value in the unitrust will help us further our work.
R-MA purchases your property for less than fair market value. You receive the cash and a charitable deduction for the difference between the market value and purchase price.
How a Bargain Sale Works
1. You sell us your property for a price less than fair market value.
2. You receive the cash from the sale and a charitable deduction for your gift to us (the difference between the market value and purchase price).
3. While you may owe some tax on the amount you receive from R-MA, the charitable deduction from your gift could offset your taxes this year.
Benefits of a Bargain Sale
If you are considering selling your property, a bargain sale will help you meet all of your goals.
• Avoid capital gains tax on your charitable gift.
• The deduction from your gift will give you valuable tax savings that may reduce your tax bill this year.
• With the cash received from the sale, you may then reinvest to create more income for your future.
• Best of all, your gift will help us further our work.
You may be looking for a way to provide your children with income while making a gift to charity. The "Give It Twice Trust" is a popular option that allows you to transfer your IRA at death to a term of years unitrust.
Benefits of a Give it Twice Trust
• Full value of IRA invested to produce income
• Payments made to children for a term of years
• Estate tax deduction and savings for your gift
• Supports R-MA's mission
How this Plan Meets Your Goals
The "Give It Twice Trust" helps you meet your goals:
• Save on income and estate taxes.
• Treat your children equally.
• Give children time to learn.
You may desire to leave your home or farm to R-MA at your death, but would like to receive a current charitable tax deduction. A life estate reserved might offer the solution you need!
How a Life Estate Works
You can deed your home or farm to us but keep the right to use the property for the rest of your life. You will be able to make a current gift to us and maintain use of your home or farm.
Benefits of a Life Estate Reserved
1. You receive a current federal income tax deduction for the present value of the remainder interest in your home or farm.
2. You preserve your lifetime use and are able to use and control the home or farm while you are alive.
Life Estate Details
• The life estate can last for your life or your life and another person’s life.
• It is possible for you to make a gift of your property even though there is a mortgage upon the residence.
• You will be responsible for the maintenance, insurance and taxes on the property.