Legacy Gifts - Frequently Asked Questions
How do I include LSSI in my estate plan?
A will is perhaps the easiest and most effective means to ensure that you fully provide for your family and that your assets are distributed as you wish. Additionally, depending on the complexity of your assets and your family situation, a trust agreement may also be part of your overall estate plan.
If you choose to make a bequest to LSSI, the following language will be helpful to you and your lawyer:
"I give, bequeath and devise _______ % of my estate or trust for $______ to Lutheran Social Services of Illinois (LSSI)."
If there are specific LSSI ministries that are special to you, you can designate those ministries as beneficiary by adding these words:
"...to be used for the general purposes of the _____________ ministry. If, during times of change, Lutheran Social Services of Illinois ceases to provide this ministry, then my gift shall be used wherever the need is the greatest." When making a gift to LSSI as part of your estate plan, please consult your legal and tax advisors.
How can I make a bequest?
- Specific bequest
Designate a specific dollar amount, specific percentage or specific property to LSSI.
- Residual Bequest
Have your estate pay all debts, taxes, expenses and specific bequests, with the remaining amount -- the residue -- transferred to LSSI.
- Contingent Bequest
Make a bequest that LSSI receives all or a portion of your estate only under certain circumstances. For example, you can name LSSI as a beneficiary of your estate only if there are no surviving close family members.
What are the advantages of making a gift to LSSI in my estate plan?
- Charitable gifts made in your estate planning documents are 100 percent deductible for estate tax purposes.
- A charitable bequest may place your estate in a lower tax bracket.
- You can decide where your bequest should be used (e.g., for general purposes of LSSI or for a particular program or ministry).
- Once you notify LSSI of your bequest intention, you qualify for membership in The Cornerstone Society.
When making a gift to LSSI as part of your overall estate plan, please consult your legal and tax advisors.
Are there other types of legacy gifts?
Other planned giving options include
- Charitable Gift Annuities
- Charitable Remainder Trusts
- Life Insurance
- Retirement Plans
- Bank or Investment Accounts
Charitable Gift Annuities
The charitable gift annuity makes it possible to transfer cash or marketable securities, such as stocks or bonds, to LSSI. In exchange, you -- and/or someone else you designate -- will receive fixed payments for life. A portion of each payment will be a tax-free return of principal. And you will also receive a significant charitable income tax deduction in the year you make the gift. If funded with appreciated securities, you may also avoid capital gains taxes.
When considering a gift annuity, please consult your legal and tax advisors as well.
Charitable Remainder Trusts
A trust is a legal agreement that specifies how the assets placed under the trust will be managed. Essentially, there are two types of CRTs:
- Unitrust income fluctuates annually with the fair market value of the trust.
- Annuity Trust income payments are fixed and determined when the gift is made.
The advantages of a CRT include: you receive income for life, avoid capital gains tax if funded with appreciated securities, receive an immediate charitable income tax deduction, the possibility of reducing your estate tax and the satisfaction of supporting LSSI.
Creating a trust requires the drafting skills of an attorney, so please consult with your legal and tax advisors, if this type of legacy gift is of interest to you.
People who may no longer need their life insurance may consider donating the policy to Lutheran Social Services of Illinois by naming LSSI as the beneficiary and owner of the policy. You may claim a charitable deduction for the policy's cash surrender value, and the proceeds are completely removed from your estate.
Another option is to purchase and give a new policy to Lutheran Social Services of Illinois by naming LSSI as the beneficiary and owner of the policy, but continuing to make gifts to LSSI to cover the cost of the annual premium.
You may also choose to make LSSI the primary beneficiary or contingent beneficiary of a life insurance policy, where you continue to be the owner of the policy.
Your insurance professional should be consulted when considering this type of legacy gift.
Bank or Investment Accounts
This gift is completed by adding a Payable on Death (“POD”) designation to any one of these accounts. This is easily accomplished by contacting your financial institution and requesting the necessary paperwork. Depending on the financial institution, the paperwork may need to be witnessed or notarized before it is returned and recorded.
Assets of qualified retirement plans, such as an IRA, 401(k) or Keough plan, may be given to LSSI. Retirement assets are often subject to punishing taxes, and a gift of these assets to a charitable organization makes it an attractive legacy gift. The most convenient way to do so is to change the beneficiary designation to include LSSI.
As with all planned gifts, be sure to consult with your legal and tax advisors.
We are available to work with your legal and tax advisors as you plan your gift to Lutheran Social Services of Illinois. Please email Susan Gilpin@LSSI.org or call her at at 847/390-1464.
Thank you for considering a gift to LSSI.
847/390-1464 or 847/635-4678 (Des Plaines)