Family Service Inc.

Foundation - Planned Gifts

Family Service, Inc. Foundation (FSIF) was created in 1993 to promote fundraising in support of the mission of Family Service, Incorporated (FSI). Through the use of “planned gifts” the Foundation is able to provide future funding for FSI, insuring that careworn families and individuals are able to receive help in their times of need.

Planned gifts are differentiated from “current gifts” in that planned gifts become available for FSI’s use at a later time, usually at the passing of the donor(s). Current gifts are the donation checks that you write that we can use “currently,” or right now, to help others.  Both "planned" and "current" gifts are important to the viability of any charity.

Why would someone wish to make a “planned gift?”

Donors often consider making planned gifts for three reasons. The first reason is that they identify with the charity’s mission and wish to support the charity financially. Second, planned gifts allow the donor to use the gift assets as long as he or she (or they) is alive, and then the gift is completed with delivery to the charity, usually by the estate representative or by a “trustee”. Third, planned gifts often provide benefits that may be important to the donor’s financial well-being that current gifts don’t provide. For example, Montana tax credit allowance, increased income, reduction or elimination of capital gains and estate taxes, and alternative utilization of personal or business assets.

What are some types of planned gifts and under what circumstances would they be advantageous to donors?

• Beneficiary Arrangements….Naming Family Service, Inc. Foundation as a beneficiary of a life insurance policy, a commercial annuity, or a retirement plan (IRA, 401k, 403b, Keogh, or SIMPLE IRA) can be a very wise decision that could save you and your heirs significant taxes while providing a thoughtful gift to FSIF or FSI. These financial instruments often have built-in pitfalls that make them ideal as gifts but not ideal for transferring to heirs through the estate.
• Bequest….Leaving assets to Family Service, Inc. Foundation through a Will or Living Trust is  called making a bequest. A bequest can be either a specific dollar amount “for the use and benefit of Family Service, Inc. Foundation”, a percentage of the estate value, or even a specific item, such as a valuable collection or a painting. The estate receives a charitable deduction for the gift.
• Gift Annuity…. A gift annuity is a simple written agreement between FSIF and the donor(s) that is a two part planned gift, the first part being an annuity (a series of periodic payments to the donor, usually for the donor’s lifetime) and the second part being a gift of the remainder of the annuity account at the donor’s passing. Donors can choose to begin receiving an immediate payment or can defer the beginning payment until later, say, at retirement. Often the donor can benefit from capital gains savings, the Montana tax credit, a charitable gift deduction and, possibly, increased income. Gift annuity payments are based on age with the older ages receiving higher payments. Payments are not dependent on volatile stock market gyrations.
• Charitable Remainder Trust (CRT)….with the assistance of the donor’s financial advisors, a trust is created that stipulates the amount and duration of payments to the donor and specifies an amount, called the “remainder” to be given to FSIF. A trustee oversees the trust assets and insures that timely payments are paid to the donor. Besides being a marvelous gift for FSIF, tax savings to a donor can be significant: a large portion or possibly all capital gains on property transferred to a CRT are forgiven. This type of planned gift is generally used when the asset is highly appreciated over its original purchase price and when the amount of the gift would be in excess of $100,000. Often real estate or appreciated securities are used to fund CRTs. Possible MT tax credit.
• Lead Trust (CLT)….this is the opposite of a CRT in that instead of FSIF receiving the “remainder”, FSIF receives periodic payments over a specified time period and when the trust terminates, the assets left in the trust pass to heirs. Assets in CLTs are often highly appreciated when the heirs receive them, but they are passed at a discounted value for tax treatment. Often this provides significant tax savings for the donor while FSIF receives periodic income for the trust’s duration. Mostly used for transferring appreciating estate assets to family members. Possible MT tax credit
• Life Estate….A senior friend may consider making an immediate gift of a personal residence to FSIF and retain the right to live in their residence for the remainder of their lifetime. When the donor has passed on, the charity may either retain use of the home or sell it. Some tax benefits accrue to the donor and the Montana tax credit may apply as well.

 

One or several of these planned giving methods may apply to your situation.  We recommend you discuss them with your financial advisors to determine suitability for you. We’d be privileged to assist you and your advisors in any way possible, including appropriate illustrations and a tour of FSI facilities. We are not a government-supported charity but count on gifts and planned gifts to support our ultimate mission of “giving a hand up, not a handout” to prevent and eradicate homelessness, helplessness, hopelessness and hunger. Because you are a crucial part in the process of helping others, we wish to be very accessible for you to contact us about current and planned giving opportunities.