A legacy fund at the Community Foundation can be an ideal recipient of estate gifts through a will or trust, or through a beneficiary designation on a qualified retirement plan or life insurance policy.

Bequests of qualified retirement plans can be extremely tax-efficient. This is because charitable organizations such as the Community Foundation are tax-exempt. This means the funds flowing directly to a fund at the Community Foundation from a retirement plan, as a result of a bequest, will not be reduced by income tax. This also means the assets will not be subject to estate tax.

Don’t overlook life insurance, either. Not only are you able to designate a fund at the Community Foundation as the beneficiary of a life insurance policy, but you also may elect to transfer actual ownership of certain types of policies. For example, when you make an irrevocable assignment of a whole life policy to your fund at the Community Foundation, a tax-deductible gift of the cash value of the policy occurs at the time of the transfer. A gift like this can ease your income tax burden, especially if the foundation continues to own the policy and you make annual tax-deductible gifts to cover the premiums.

The Community Foundation makes it easy for you to draft bequest terms in legal documents, including beneficiary designations of retirement plans and life insurance policies. Please contact Mike Nuno to create a legacy fund with the exact language that will ensure alignment with your intentions.