Gifts of Cash

If you itemize, you can lower your income taxes simply by writing a check to the Springfield Workshop Foundation. Gifts of cash are fully deductible – up to a maximum of 50% of your adjusted gross income!

Gifts of Stock

If you own stock, it is often more tax-wise to contribute stock than cash. This is because a gift of appreciated stock generally offers a two-fold tax saving. First, you avoid paying any capital gains on the increase in value of the stock and secondly, you receive an income tax deduction for the full fair market value of the stock at the time of the gift.

Example: If you purchased some stock many years ago for only $1,000, and it is now worth $10,000, an outright gift of stock to us would result in a charitable contribution deduction of $10,000. In addition, there is no tax on the $9,000 of appreciation.

Make sure you have owned the stock for a “long-term” period of time (this generally means that you have held the stock for more than one year) to qualify for these significant tax advantages. Gifts of appreciated stock are fully deductible – up to a maximum of 30% of your adjusted gross income. Any excess can generally be carried forward and deducted over as many as five subsequent years.

Gifts of Real Estate

A gift of real estate can also be tax-wise. A residence, vacation home, farm, acreage, or vacant lot may have so appreciated in value through the years that its sale would mean a sizeable capital gains tax. By making a gift of this property instead, you would avoid the capital gains tax, and, at the same time, receive a charitable deduction for the full fair market value of the property. It is also possible to make a gift of your home, farm, or vacation home so that you and your spouse can continue to use it for your lifetimes–while you receive a current income tax deduction.

Example: Mr. and Mrs. Smith own a vacation home in the mountains that they would like to continue using. Its fair market value i is $100,000. By contributing the home to us now, but retaining the exclusive right to use it for the rest of their lifetimes, the Smiths are able to achieve a current income tax charitable contribution deduction of approximately $25,000. (The precise amount will depend upon their ages, the useful life of the house, and other factors.)

Gifts of Life Insurance

A gift of life insurance can provide a significant charitable deduction. You could purchase a new policy or donate a policy that you currently own but no longer need. To receive a deduction, designate the Springfield Workshop Foundation as both the owner and beneficiary of the life insurance policy. Check with your insurance agent for the details.

Example: Mr. Anderson owns a $100,000 life insurance policy with a current cash value of $34,582. By transferring the policy to the Foundation, as the new owner and beneficiary, Mr. Anderson is able to receive a current charitable deduction of approximately $34,582. If Mr. Anderson decides to continue paying the premiums on the policy after the gift is made, these additional premium payments will be tax deductible each year.

Bequests

The Springfield Workshop Foundation can be named as a beneficiary in your Will in any one of a number of simple ways. An outright gift, either a designated dollar amount or percentage of your estate, can be specified. The Foundation could also be named as a remainder beneficiary to receive funds only after specific sums have been paid to individual beneficiaries. It may be helpful to know that you can easily add us to your Will through an amendment to your Will called a codicil; thus your entire will does not have to be redrafted.

Gifts of Life Insurance

How often have you thought that you would like to make a substantial gift to the Springfield Workshop, but didn’t feel your financial circumstances would allow it? Perhaps there is a way, a way that is easier than you ever thought possible and cost you a fraction of the amount that you could ultimately give?

You can make a substantial contribution to the Workshop by making a gift of life insurance. This brochure discusses many of the benefits and advantages of donating life insurance. You may have purchased a policy to help assist you in retirement. But your financial situation is now such that you no longer need it. It could be that your employer has provided you with an adequate retirement plan or simply that your financial circumstances have changed.

Benefits & Advantages

A gift of life insurance is an excellent way to make a substantial, meaningful gift for a modest cash outlay. For example, just a few hundred dollars a year in premium payments can often purchase a $100,000 policy. Yet $100,000 earmarked for the Springfield Workshop would be a significant commitment to the future. Keep in mind, that many of the newer insurance products require that premiums be paid for only a period of perhaps ten years, after which time the insurance will continue in force with no additional premium payments.

Tax Laws make it easy

Through the charitable income tax and estate tax deductions, Congress encourages philanthrophy. If appropriately structured, a gift of life insurance qualifies for these deductions. For example, if you name the Springfield Workshop as the owner and beneficiary of an existing policy, you will receive a charitable income tax deduction for the value of the policy contributed. In addition, you will receive a charitable deduction each year for the continued payment of premiums.

Make a gift that keeps on giving

If you are currently making an annual gift to the Workshop and would like for these gifts to continue beyond your lifetime, you may want to consider a gift of life insurance. Through naming us as the owner and beneficiary of a policy (or even by naming us as just the beneficiary), the proceeds from the policy could be used to endow your annual gift for generations to come. What a way to make a truly lasting gift!

Gifting an existing policy

Almost everyone has some degree of life insurance coverage and many of us has old policies that were purchased many years ago and have been “replaced. That insurance could be in the form of group protection provided by your employer or in the form of an individual policy you purchased from a professional life insurance agent or financial planner. Whatever its origin, you may have more life insurance than you realize. And, since the primary purpose of life insurance is to provide coverage for financial loss resulting from death, it could be that you have more coverage than you actually need. After considering the benefits and advantages of a gift of life insurance, you may decide that it is one of the best possible ways for you to make a substantial charitable contribution.

Although everyone’s circumstances are different, the following examples represent situations in which a gift of an existing life insurance policy may be appropriate. You may have purchased a life insurance policy when your children were young but now you find that your children are grown and out on their own. Yet you continue to pay premiums on a policy originally purchased to meet a need that no longer exists. You may have purchased a policy to help assist you in retirement. But your financial situation is now such that you no longer need it. It could be that your employer has provided you with an adequate retirement plan or simply that your financial circumstances have changed.

Preparing a Will is one of the most important exercises you will ever undertake and should include the consultation of an attorney and possibly a tax adviser, but as you begin to consider all of your options, please consider the following: Your Will should distribute your property according to your precise wishes, It should minimize your taxes and the taxes of those who will benefit from your estate, It should care for any special needs your beneficiaries may have, and lastly, your Will should minimize costs.

As you prepare to visit with your attorney and tax professional, consider the following questions: What assets do you own? Which assets do you own jointly with your spouse or others? Who should receive which assets?

Should your beneficiaries receive the assets outright—or do you want to place some assets in trust to protect the asset and the beneficiaries? Do you wish to make any charitable bequests? Who should serve as your executor and/or trustee? Who will be the guardian for any minor children in case both you and your spouse are deceased? If you become incapacitated during life and cannot manage your assets or care for yourself, what arrangements should be made? Your attorney will ask you to consider all of these issues and a they will provide you with a number of options on how your Will should be drafted. Some attorney’s will even provide you with a checklist of information needed prior to your initial meeting.

Updating an Existing Will

Even if you have a Will, failure to revise it periodically means that it may not reflect significant changes, such as the birth of a child or grandchild, the loss of a loved one, divorce, remarriage, or a major change in your financial situation. Some of these changes could automatically invalidate an existing Will. For example, in many states divorce invalidates both spouses’ existing Wills. As a general rule, you should review your Will every two to three years. But in the event of a significant change in your personal or financial situation, your Will should be reviewed immediately upon the occurrence of the event, if not before.

Minimize Federal Estate Taxes

An important reason for having an up-to-date Will is to minimize the amount of federal estate tax assessed at the time of death. If your estate is subject to tax, the federal estate tax can be approximately 50% of the value of your estate. Planning can minimize or even eliminate the estate tax. One of the best methods for protecting your assets is to take advantage of the unlimited marital deduction. You can leave your entire estate to your spouse without an estate tax being imposed. Although the transfer of your entire estate to your spouse is allowed tax-free, your surviving spouse’s estate then increases in value–and could potentially be heavily taxed at the time of your spouse’s death.A useful method for helping to protect assets from taxes, while providing financial management for your surviving loved ones, is to establish trust arrangements through your Will. You can arrange for trusts to support your minor children and then have the assets pass outright to your children when they reach a specified age. A marital trust can be created to provide for your surviving spouse—and then additional beneficiaries once your spouse is no longer living. Such an arrangement can help protect the assets from an estate tax assessment.

Become Tax Wise

One of the best ways to save on federal estate taxes is to provide for a charitable bequest in your Will. Tax laws favor those who are charitably inclined. A bequest in your Will which remembers the Springfield Workshop is fully deductible for federal estate tax purposes. Plus, you are providing meaningful support for all that we do.An outright charitable bequest can be money, stocks, bonds, real estate, or other assets. The Foundation would be named in a separate item of the Will to receive a specific dollar amount or a percentage of the estate. Or, the Foundation could be named to receive “x” number of shares of stock, a particular piece of real estate, etc. The bequest may be made unrestricted or for a particular purpose. It could specify whether the funds may be currently expended or whether a permanent endowment is to be created with only the income used on an annual basis.