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Many potential donors mistakenly assume the only way to support CP is by making an outright gift. Not true.
In fact, with careful and thoughtful planning, you can provide for your loved ones and support CP at the same time by choosing a financial option that is right for you.
All members of the Founders Society are investing in the future of our students at Community Preparatory School. The Society seeks to ensure the future excellence of a Community Prep education through support of the endowment. Once you have completed your estate plan, please let us know so we can appropriately thank you and acknowledge your commitment to Community Prep's future in our annual publications.
There are many ways to support Community Preparatory School’s future that do not affect you and your family during your lifetime. Although including a bequest to Community Prep in your estate plan is one way to leave a legacy, there are other arrangements, similar to bequests, which are simple, straightforward, and accomplish the same goal.
Bequests are a flexible planning tool that may be the ideal way for you to meet your personal objectives while also supporting Community Preparatory School.
You can provide now for a future gift to CP by including a bequest provision in your will or revocable living trust.
Gifts of IRAs, 401(k)s, or other qualified plans are popular planned gifts because they require no “upfront” cash. You simply designate Community Preparatory School School as the beneficiary of all or a portion of your retirement plan through your plan administrator. You can continue to take withdrawals during your lifetime and even change the beneficiary if your circumstances change. After your lifetime, the residue of your plan passes to Community Prep tax-free.
Benefits Include:
You can escape both income AND estate tax levied on the residue left in your retirement account by leaving it to Community Prep.
Give the most-taxed asset in your estate to Community Prep and leave more favorably taxed property to your heirs.
You can continue to take withdrawals during your lifetime.
You can revoke Community Prep as a beneficiary if your circumstances change.
You have the satisfaction of making a significant gift to Community Prep later on.
Life insurance can be used in several ways to make a lasting gift to Community Preparatory School.
You can simply designate Community Preparatory School as the beneficiary (or contingent beneficiary) of an existing life insurance policy – and continue to own the policy as before.
Benefits Include:
You part with nothing during your lifetime.
You continue to own the policy and retain the right to change beneficiaries.
If insurance proceeds are paid to CP after your lifetime, your estate may be entitled to tax benefits because of the gift. Alternatively, you can transfer ownership of a paid-up life insurance policy to CP, making CP the owner and irrevocable beneficiary of the policy. We will either cash the policy immediately or maintain it and receive the death benefit later.
You make a gift using an asset that you and your family no longer need.
You receive an immediate income tax deduction for the (approximate) cash surrender value of the policy.
You have the satisfaction of making a significant gift to Community Prep without affecting your cash flow.
Gifts that pay lifetime income may have many benefits:
Dependable income for you and your family, current and future tax savings, and an important way to support Community Prep.
Life income gifts can be an excellent way to balance your personal and philanthropic goals.
A CRT is an arrangement that allows you to provide an income to yourself or others for life (or a term of years), after which the trust assets go to Community Preparatory School to help educate Community Prep students for years to come. A charitable remainder trust is a special type of trust fund that achieves three things:
It generates income for a beneficiary of the trust fund to live upon.
It results in a significant gift to a non-profit charitable institution at the end of a set amount of years or when the beneficiary passes away.
It lets the donor avoid capital gains taxes on appreciated investments, resulting in more money for both the beneficiary and the charitable institution. To clarify, normally, if you have a highly appreciated investment paying few dividends and want more income, you must sell the asset and pay capital gains taxes. The great benefit of CRTs is you donate the appreciated stock to a CRT, then the CRT's trustee can sell the stock, pay no capital gains taxes, and invest 100% of the proceeds to produce income for both the donor and the charity.
The recently signed legislation, Protecting Americans from Tax Hikes Act, permanently extends the IRA Charitable Rollover Provision. The provision allows individuals who have reached age 70½ to donate up to $100,000 to charitable organizations directly from their Individual Retirement Account (IRA), without treating the distribution as taxable income.
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If you have any questions about making a legacy gift or would like more information about planned giving vehicles, please contact Lisa Dantas, Chief Development Officer: ldantas@communityprep.org or (401) 432-7318.
While we are always happy to talk to you, we would be remiss if we did not advise that you discuss your plans with your financial advisor or attorney.
