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Including the Pikes Peak Chapter in your estate plan helps secure the future of vital Red Cross programs and services and can help you achieve your financial goals as well! Consider these options:

Including the Red Cross in Your Will
Having provided for their loved ones, many of our supporters name the Red Cross as a beneficiary in their wills. In making a bequest to the Red Cross, the following language will be helpful to your attorney:

I give, devise, and bequeath to the American Red Cross, Pikes Peak Chapter, the sum of $________(or otherwise describe the gift if property or some other tangible asset.) A better option is to specify a percentage of the estate, or the residual of the estate after other specific bequests and expenses are paid.

Life Income Gifts--Gifts That Give Back
Life income gifts allow you to make a meaningful lifetime gift without sacrifice, and have the satisfaction
of knowing that your thoughtfulness will help ensure the future of the Red Cross. In return for irrevocably transferring some assets to the Red Cross or a trustee, you get an immediate income tax deduction, and receive lifetime payments (some of which may be tax free) for yourself and/or a designated beneficiary. Upon the death of the last beneficiary, the assets revert to the Red Cross to help carry out its mission.

Examples of Life Income Plans:
Charitable Gift Annuity
In exchange for your gift of cash or securities, the American Red Cross will pay you (and a survivor or other beneficiary named by you) fixed annual payments for your lifetime(s). The rates of return are very attractive, and vary with age(s) of annuitant(s). The older the annuitant(s) the higher the rate. The minimum amount is $5,000, and the minimum age to begin receiving payments is 65.

Example: John Smith is 80, and his wife Mary is 75. They transfer $20,000 to the American Red Cross for a gift annuity and receive $1,240 each year ($20,000 x 6.2%--the rate for their combined ages) for life, some of which will be tax free. They may also claim a generous income tax deduction for the year in which the annuity is established. The full payment is guaranteed for both their lifetimes.

If you, wish, you may also defer a Gift Annuity. This is a great option if you are concerned about having enough retirement income. You can make the gift now, receive a generous tax deduction for a portion of the gift, and the Red Cross will pay you (and another beneficiary if you wish) lifetime payments starting on a date you specify. The amount you receive depends upon the amount of your gift, your age now, and your age when the payments are scheduled to begin.

Example: Sue Jones, age 50, transfers $10,000 worth of appreciated stock to the Red Cross for a deferred Gift Annuity, with payments to begin at age 70. (By funding the gift with stock, she avoids the capital gains tax that would be due if the stock was sold.) Her payment rate will be 15.3%, and she will receive $1,530 per year for life (15.3% X $10,000). She can also claim an income tax deduction for the year in which the gift is made.

Charitable Remainder Trusts
This life income plan is created by transferring assets to a trust that pays you (and another beneficiary if you wish) income for life, as well as providing an immediate income tax deduction. At the end of the trust, the remaining trust assets are transferred to the Red Cross. The Red Cross can serve as trustee, or you may choose a bank or trusted adviser. Once the trust has been created and assets have been transferred to fund it, it cannot be revoked by the donor.

The type of remainder trust you choose determines your annual payments. Options are:

Charitable Remainder Annuity Trust (CRAT)
The CRAT pays a fixed dollar amount annually for life. The payment percentage is selected at the time the trust is created. You receive a charitable income tax deduction for the year in which the trust is created. Income from the trust is taxed as ordinary income, and in some cases as capital gain or tax-free return of principle.

Example: Mrs. Johnson transfers $100,000 to create an Annuity Trust that will pay her income at the rate of 6% per year. She will receive $6,000 per year for life. Any income earned by the trust in excess of the $6,000 fixed payment is reinvested.

Charitable Remainder Unitrust (CRUT)
The CRUT pays a fixed percentage of the fair market value of the trust assets, as revalued each year. You can claim an income tax deduction for the year in which the trust is created. Income is taxed as ordinary income, or in some cases as capital gain or tax-free return of principle, just as with the Annuity Trust.

Example: Joe Edwards transfers $100,000 to create a CRUT that will provide him and his wife with lifetime income payments. The Trust specifies a payout rate of 6% of the fair market value of the trust's assets each year. In year one, he and Mrs. Edwards receive $6,000 from the trust. ($100,000 X 6%) One year later, the trust assets are valued at $110,000, and the payment is $6,600 ($110,000 X 6%) If the trust assets were worth $120,000 the next year, the couple would receive $7,200, and so on each year. Payments may increase or decrease, depending upon the value of the trust. When trust income exceeds the stated payout percentage, it is added to the trust assets and reinvested.

Gift Calculator
To see what income and deductions could be for specific types of life income plans and
determine how they might fit into your overall estate planning, click on the link below to connect to our national website. When the page comes up, scroll down to "Calculator"” click on that link, and follow the directions. The calculator is very easy to use!

http://www.redcrosslegacy.org/calc.php

Gifts of Life Insurance and Retirement Plans
If you own life insurance that is no longer needed for its original purpose, please consider donating the policy to the Red Cross. You can claim a charitable income tax deduction for the approximate cash surrender value of the policy, and the proceeds are removed from your estate. Younger individuals can also purchase life insurance at very low rates, and name the Red Cross as a beneficiary.

Likewise, if you have over-funded qualified retirement plans such as an IRA, 401(K) or Keough Plan, gifts from these plans either directly or through a trust created in your will, can help reduce your taxable estate while supporting the vital work of the Red Cross either now or in the future.

The Legacy Society
When you make a planned gift to the Red Cross, we will be pleased to honor you with membership in our Legacy Society. If you have already included the Red Cross in your will or other estate plans, please contact us. We realize that by making this special gift, you consider us to be part of your family, and we want to keep you informed as to how the Red Cross will use your gift to provide life-saving services and programs to the community.

For more information, or to request a free copy of our estate planning booklet, Touching the Future: A Guide To Estate Planning and Charitable Giving, please call Paul Jonas at 800-417-0495, then "0" or email JonasPa@usa.redcross.org.