Estate Planning Questions

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1. What are the three kinds of gifts I can give to the ABTA?


Generally speaking, during your lifetime you can make an outright gift of cash, securities or other property (e.g., post-sale real estate, personal property) to the organization.


You can also make an estate gift through your will, revocable trust or by designating the ABTA as a beneficiary of your retirement plan, life insurance policy, etc.


In some cases, the ABTA may able to coordinate an estate gift plan with you that returns lifetime payments to you, your spouse, or other individuals, such as a charitable gift annuity or charitable remainder trust.  These types of estate gifts necessitate greater planning and discussion with the ABTA and your estate/financial planner so we encourage you to contact Stacy Fass at 773-577-8781 or sfass@abta.org for more details about such options as annuities, remainder trusts, lead trusted and ILITS.


2. What sort of assets can I use to make a gift?


Almost any asset can be used to contribute to the organization such as cash, publicly traded securities and in some cases private as well, life insurance policies, the balance in your retirement account and much more. Other assets can be very valuable but are more complicated to administer and would need to be reviewed by us before we can accept them as gifts.  In cases of closely held stock, real estate and artwork we recommend your estate executor provide ABTA with the post-sale proceeds of such gifts.


3. What tax deduction will I receive for my gift?


It depends on the form your gift takes as well as the current tax laws:

  • Outright gifts to the ABTA generate a full income-tax charitable deduction. Outright gifts of appreciated securities are deductible at fair market value, with no recognition of capital gains - a great tax benefit!
  • Gifts of personal property, like art, books and collectibles, are fully deductible so long as they are relevant to our mission. We recommend you provide ABTA with the post-sale proceeds.  In forwarding the net proceeds of sale to the ABTA, your gift will now be fully tax deductible.
  • Bequests do not generate a lifetime income tax deduction. They are however, exempt from estate tax.
  • Similarly, life insurance distributions to the ABTA are not income-tax deductible, but are exempt from estate tax.
  • A lifetime gift of an insurance policy to the ABTA generates a deduction for the value of the policy. If you give a policy with premiums still owing, you may also deduct annual gifts that offset our premium payments (for more details on this point, see Question 5 below).
  • The charitable deduction for a gift that makes payments to you, such as a charitable gift annuity or a charitable remainder trust, is the fair market value of the gift asset minus the present value of the income interest you retain.


4. Can the ABTA serve as the Executor of my estate?


No. State law, the limitations of our corporate powers, and our internal policies prevent us from taking such a role in your affairs.


5. I want to set up a life insurance policy, name the ABTA as beneficiary, but retain ownership of the policy. Can I deduct the premium payments I make?


No. The IRS would not consider that a "completed gift" - they'd say that, as the owner of the policy, you could change the beneficiary designation to a friend or family member. The ABTA must be made the "irrevocable owner" of the policy for gifts offsetting premium payments to be deductible.  If interested in this estate gift, you will want to contact your financial planner about ILIT options.


6. Can I transfer my IRA to set up a life-income gift, and avoid income tax on the transfer?


New legislation gives donors aged 70½ and older an opportunity to direct lifetime distributions from their IRAs to us without incurring income tax liability on the withdrawal. The provision will be in effect for just the 2006 and 2007 tax years so to be current, you will want to do further research about active legislation. Distributions can total $100,000 per year, and must be made outright — they cannot fund a life-income gift. 


7. I'd like to donate a painting or rare book. Will you determine its value for my income tax deduction?


No, we cannot. The IRS requires that donors of artwork and collectibles secure an independent appraisal of the items to establish fair market value, at the cost of the donor. The appraisal has to be related to the gift, too - an insurance appraisal will not suffice. We recommend you specify in your will the item(s) you would like to benefit the ABTA and have your executor then provide ABTA with the post-sale proceeds of those item(s).


8. I'm interested in establishing a charitable gift annuity. What financial provisions do you make for the income payments to me and my spouse?


Your charitable gift annuity will be treated as a general obligation of the ABTA, backed by all its assets. The ABTA is in full compliance with state provisions regarding non-profits' offering of gift annuities. 


9. If I create a bequest or life-income gift, will the ABTA continue to ask me for annual contributions?


We will, because the commitments address two different needs. Your estate gift is a significant addition to our long-term financial strength - our ability to meet the challenges and opportunities the future will bring. The obligations and expenses that we encounter today, however, are met through your annual gift. We are very grateful that you want the ABTA to succeed both today and in the future.

 

10. How can I get more information about leaving a lasting legacy with the ABTA or to let you know I have named the ABTA in my will or estate?

 

We are always happy to discuss estate gift options and opportunities with you at any time.  To so, please fill out and return our Inquiry and Enrollment Form.  You will hear from us shortly after.