Planned Giving Options:
"Planned Giving" is a term that for many people sounds quite imposing and perhaps not clear what it means. Simply stated, planned giving is charitable giving that is part of a family's financial and estate planning.
For people of faith, estate and financial planning is a key component of stewardship. Stewardship is realizing in our minds and hearts that everything we are and everything that we have are God's loving gifts to us; we are merely stewards of those blessings.
There are four basic principles of stewardship:
- Praying to God with grateful hearts,
- Nurturing our family with time and love,
- Sharing our gifts with our community, and
- Returning to God the first fruits of our labors.
We understand these principles pretty well during our life. We pray; we spend time with our family; we volunteer for ministries and activities in our parish, school, neighborhood and community; and we contribute funds to the Church and our favorite charities.
These same stewardship principles apply to our estate planning; our estate plan can rightly be considered our final act of stewardship. We should pray for God's guidance on the appropriate distribution of our estate property. By making a will and executing other estate planning documents we ensure that our family is taken care of after we are gone. By making a bequest or other special gift to the Church through our parish, the Archdiocese of Detroit Endowment Foundation, or other archdiocesan agency we ensure that those ministries and activities we supported with our time, talent and treasure during our life will continue to flourish for many future generations. And certainly, these bequests and special gifts do in fact return to God the first fruits of our labors.
Estate and charitable gift planning is stewardship of our assets, just like our weekly offering during our life is stewardship of our income. It is common, however, to plan our estate with everything eventually distributed to our family. But we should ask ourselves several questions as food for thought in determining our estate and financial goals and objectives:
Is giving relatively large sums of money to my children when they are young a wise thing to do?
Did I give everything to my children when I was alive, or did I give to the Church and charities as well? Why should it be different for the distribution of my assets?
Is making a charitable bequest or other special gift in my estate plan perhaps my final opportunity to teach my children that everything we are and have is God's gift to us?
Only you can answer these questions as you and your family develop your estate and financial plan and then review your plans periodically to determine they still meet the goals and objectives for you and your family.
The pages within Planned Giving describe some gift opportunities for you to consider as you plan your family's future in the spirit of stewardship.
Bequests
The simplest planned gift to the Church is a bequest in your last will or testament or in your living trust to your parish, the Archdiocese of Detroit Endowment Foundation, Sacred Heart Major Seminary or another archdiocesan institution. This demonstrates the obvious necessity to have a valid will or trust in order to accomplish your goal of leaving a legacy to the Church as your final act of stewardship.
Even if you choose not to make an outright bequest to the Church, it may be a good idea for you to consider the Church as the beneficiary of a contingent bequest in the event all of your other named beneficiaries no longer exist at the time of your death. This is sometimes referred to as a "clean up" provision. It ensures that your property is distributed according to your plan rather than the state law on estate distributions.
A tax planning point for bequests: To the extent possible, your bequests to the Church should be from assets referred to in the Internal Revenue Code as "income in respect of a decedent." Some examples of these assets are U.S. government savings bonds and retirement plans such as 401(k) plans and IRAs. These assets are ideal for bequests to the Church because they are subject to income tax if received by a tax-paying beneficiary, such as a family member. However, since the Church, like other charities, is tax-exempt, income tax can be avoided on bequests of these assets to the Church. Other assets, such as bank accounts, life insurance and corporate stocks and bonds, which do not suffer this income tax taint, are better assets to distribute to family beneficiaries.
Bequests may take several different forms:
- A bequest of a specific amount:
I give $$$ to.... - A bequest of specific property:
I give 100 shares of XYZ Corporation to.... - A bequest of a portion of the residue of your estate:
I give 10 percent of the remaining property in my estate to.... - A bequest of the complete residue of your estate:
I give all of the remaining property in my estate to....
The following are some beneficiary designations for various Archdiocese of Detroit institutions.
- To your parish:
To Most Reverend Allen H. Vigneron, Archbishop of the Archdiocese of Detroit, and his successors in office, for the benefit of (name of parish and city). - To the Archdiocese of Detroit Endowment Foundation:
To the Archdiocese of Detroit Endowment Foundation, Detroit, Michigan. - To Sacred Heart Major Seminary:
To Sacred Heart Major Seminary, Detroit, Michigan.
Gift Annuities
A charitable gift annuity is a simple arrangement between you and the Archdiocese of Detroit Endowment Foundation. In exchange for your gift of cash or marketable stocks and bonds, the foundation promises to pay a fixed sum each year to one or two annuitants that you name. The payments are guaranteed by the general resources of the foundation, not by just the amount you give.
Annuity payments continue as long as at least one of the annuitants is living. A portion of the payment may be tax-free as a return of your investment in the annuity contract. If you give appreciated stock to the foundation for the annuity, a portion will be taxed as capital gain.
The annuity payment rate is based on the age or ages of the annuitants using tables developed by the American Council on Gift Annuities (ACGA). These rates are less than offered in commercial annuities because a portion of your gift is a charitable contribution and deductible on your income tax return if you itemize deductions.
Favorable tax treatment on the transfer of property to the foundation for an annuity arrangement makes a charitable gift annuity an excellent way to diversify an investment portfolio to provide some fixed income at the least capital gain tax cost. In addition, you may enjoy additional cash flow since the annuity rate will often be significantly higher than the dividend or interest paid on the stock or cash you transfer to the foundation.
IRA Rollover
What you need to know about the IRA charitable gift rollover
Congress has extended and the president has signed the favorable IRA charitable rollover tax provisions for 2015 and made them permanent for future years.
What should a donor over age 70½ do in order to get the benefit that IRA distributions will not be included in taxable income? Donors should follow the same general procedures for IRA charitable distributions as in the past —
- Only direct distributions to charity up to $100,000 qualify as tax-free. Distributions in exchange for a charitable gift annuity or to a charitable remainder trust do not qualify.
- It is especially important that the IRA distribution be made payable to the charity, not to you as the IRA owner and beneficiary. Otherwise, the distribution would not qualify for the favorable tax treatment. Advise your IRA administrator to make the distribution check payable to the Church or other charity, not to you.
- Only distributions from traditional or certain Roth IRAs are tax-free; the law does not apply to other quali¬fied retirement plans, such as 401(k) plans. However, you should consider consulting with your financial or tax advisor about the possibility of trans¬ferring funds from one of these other qualified plans to establish an IRA, with the distribution to charity com¬ing from the newly established IRA.
- Consult with your IRA administrator and tax advisor on the proper procedures for making a direct distribution to your parish, the Archdiocese of Detroit Endowment Foundation, the Catholic Services Appeal, Sacred Heart Major Seminary, Catholic Charities of Southeast Michigan, or another archdiocesan institution or qualified charity.
Life Insurance Gift
Advantages of Giving Through Life Insurance
You can use life insurance in many ways for giving to the Church through your parish, the Archdiocese of Detroit Endowment Foundation, Sacred Heart Major Seminary or other archdiocesan institutions. Through life insurance, you can continue to support those Church ministries that have relied on your generous lifetime gifts after your death. Some advantages of giving through life insurance policies are:
- Your wishes will be carried out as specified in the policy
- The Church will receive the amount specified in the policy
- The proceeds will be paid promptly in cash and will not be diminished by probate costs
- Your gift will not be exposed to public view or contest
- The proceeds usually exceed the net amount of the premiums you paid on the policy; thus, your gift is multiplied
- You may be entitled to tax savings on your gift of the policy
How to donate through life insurance
There are several ways to donate life insurance to the Church.
If you no longer need your policy for your estate or family's protection, you can make a gift now by assigning your policy to the Church. An assignment of the policy transfers all your rights of ownership. These rights include changing the beneficiary, borrowing from the policy, or surrendering the policy for its cash value.
You are entitled to an income tax charitable contribution deduction for the replacement value of the policy, or the net amount of premiums you have paid, whichever is less. You also will be entitled to an income tax deduction for any premiums you pay on the policy after you assign it to the Church. Moreover, you will have removed the death benefit proceeds from your estate that may otherwise be subject to estate tax.
If you no longer need the death benefit of your policy, but you want to retain ownership, you can give the death benefit proceeds to the Church by naming your parish, the foundation, the seminary or other archdiocesan institution the beneficiary of your policy. You can name one or more of these Church institutions as:
- Primary beneficiary, to take the proceeds upon your death
- Contingent or secondary beneficiary, to take the proceeds if the primary beneficiary predeceases you; or
- Partial or residual beneficiary, to take the proceeds along with ther named beneficiaries
By naming the Church as a beneficiary but retaining ownership of the policy, you will not be entitled to an income tax charitable contribution deduction. However, your estate will receive an estate tax charitable gift deduction when the Church receives the policy proceeds.
If you would like to use your life insurance policy to contribute to the Church, you should contact your insurance agent or your insurance company's home office for the forms needed to assign the ownership or change the beneficiary of the policy.
Other uses of life insurance in charitable gift planning
You may use life insurance to replace assets in your family's estate that you contributed to the Church through a gift annuity or charitable remainder trust. The income tax savings and possibly increased cash flow from those charitable gifts would provide funds for the new policy premiums. Moreover, your new policy can be assigned to an insurance trust that you establish to remove the proceeds from your estate for tax purposes.
Stock Gifts
Please take the following steps to make a gift of stock or mutual fund transfer to your parish, Archdiocese of Detroit, or Sacred Heart Major Seminary:
- Provide your broker with the following Archdiocese of Detroit account information:
Investment firm: Morgan Stanley Smith Barney
Name of account: Archdiocese of Detroit
Account number: 272108385
Transfer ID (DTC #): 0015
2. Contact Finance/Brokerage Gift Processing at (313) 237-5785 or stockdonations@aod.org to notify us of the stock transfer and provide the following information:
- Name of the company/stock and ticker symbol, number of shares and date of transfer
- Name of organization or fund you wish to receive the proceeds from the stock sale/donation.
- The purpose(s) for which you wish the proceeds to be used—such as CSA, where needed most, General Fund, Offertory, or a more specific, existing purpose of the beneficiary. That purpose must have been established by the beneficiary. For example, a named campaign or funding for roof replacement. Please contact the beneficiary for this information, keeping in mind that “where most needed” allows for the greatest discretion by the beneficiary.
- Your name and address, so we can properly acknowledge your donation and to provide you with a donation statement for tax purposes.
Please note: Due to privacy laws, brokers are not authorized to share your name with us, so we will be unable to identify the organization/fund that is to receive the proceeds unless you contact us and provide the above information.
Thank you for your generosity.
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How it Works
2. In exchange, Archdiocese pays you a fixed amount each year for the rest of your life.
3. When your gift annuity ends, its remaining principal passes to Archdiocese.