Gifts
to benefit the Maui Arts & Cultural Center now:
• Charitable
lead trusts are an attractive method that
allows
you to leave property to your heirs, reduce
gift and estate tax costs, and provide income to MACC.
To create a charitable lead trust, you contribute assets
to a trust and set an amount or a fixed percentage,
which is then paid to MACC for a designated period
of time. At the end of this time period, the trust
is dissolved and the property is either returned to
you or distributed to named beneficiaries, thereby
removing these assets from your estate.
• Gifts of tangible personal property that are useful to MACC, including real
estate, can offer an immediate tax deduction and,
if qualified as a long-term capital asset (held
for a year and a day), offer avoidance of capital
gains tax, removal of the asset from your estate,
and, if appropriate, elimination of maintenance
costs of the property. Valuation for income tax
purposes may require that you obtain an independent
appraisal. The deduction is limited to 30% of adjusted
gross income. Excess beyond 30% can be carried
forward for five additional years.
• Gifts of life
insurance proceeds. You can liquidate a life insurance
policy no longer needed for family protection and
give the proceeds to MACC. This will give you an
immediate tax deduction as well as reduce your
estate and inheritance taxes by distributing part
of your net worth during your lifetime.
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Gifts
to benefit the Maui Arts & Cultural Center in the future:
• Bequests/giving
through your will. You may make a
bequest to MACC by preparing a new will or adding a
codicil amending an existing one. A bequest is not
subject to federal or state estate or inheritance taxes
and is, in fact, deductible in calculating the taxable
estate. There is no limit to the amount of that deduction.
The following language is appropriate for making an
unrestricted bequest: “I give (the sum of ____ dollars),
(all or _____percent of the residuary of my estate),
to the Maui Arts & Cultural
Center, Kahului, Hawaii, for its general corporate
purposes.” • Charitable
remainder trusts enable you to contribute to the future of
MACC, retain lifetime annual payments, and generate
significant tax benefits. You make an irrevocable
gift to MACC and set an amount or fixed percentage
that is then paid to you, providing life income for
yourself and a survivor. For an annuity trust, the
amount is set when the trust is created, either as
a fixed percentage or a set dollar amount of the
then fair market value of the trust assets. For a
unitrust, the amount is a fixed percentage of the
fair market value of the trust assets as determined
annually.
• Gifts of life insurance.
You can name MACC as a beneficiary of all or part
of the proceeds from a life insurance policy. Or,
you can give a paid-up policy, a new policy, or a
policy on which you are still paying naming MACC
as sole owner and beneficiary and take a deduction
for the “present value” of the policy (approximately
the cash surrender value or the cost basis, whichever
is less). In these instances, you diminish your estate
and inheritance taxes by distributing part of your
net worth during your lifetime.
If you continue to
pay the premiums to maintain the life insurance policy,
you will also be able to deduct the premium payments
as charitable contributions.
You can also use life
insurance as a “replacement” asset. You give appreciated
property to MACC either outright or to fund a life
income arrangement, then replace the dollar value
of the property with life insurance for your family.
The tax saving from your gift is often sufficient
to cover the cost of the replacement insurance. And
the insurance proceeds can be paid outside of your
estate.
For more information, please contact Lisa at 242-2787
x236 or at lisa@mauiarts.org
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