Leave a Legacy
A planned gift to the Morgan-Lawrence chapter helps secure the future of vital Red Cross programs and services and can help you achieve your financial goals as well.

When you make a planned gift to the Red Cross, we will honor you with membership in our Legacy Society. If you have already included the Red Cross in your will or estate plan, please contact us. We realize that by making this special gift, you consider us to be part of your family, and we want to keep you informed as to how your gift will be used and provide the opportunity for you to express your wishes.

Here are some options you may want to consider:

Include the Red Cross in Your Will
Having provided for their loved ones, many of our supporters make charitable gifts by naming the Red Cross as a beneficiary in their wills. To make a bequest to the Red Cross, the following language will be helpful to your attorney:

I give, devise, and bequeath to the American Red Cross, Morgan-Lawrence Chapter, the sum of $ _________(or otherwise describe the gift if property or some other tangible asset.) Another option is to specify a percentage of the estate, or the residual of the estate after other specific bequests and expenses are paid.

Life Income Gifts
Life income gifts allow you to make a meaningful lifetime gift without sacrifice, and have the satisfaction of knowing that your thoughtfulness will help ensure the future of the Red Cross. In return for irrevocably transferring some assets to the Red Cross or a trustee, you get an immediate income tax deduction, and receive a lifetime income (some of which may be tax free) for yourself and/or a designated beneficiary. The assets then revert to the Red Cross to help carry out its mission.

Examples of Life Income Plans:

Charitable Gift Annuity
In exchange for your gift of cash or securities to the American Red Cross, Morgan-Lawrence chapter, we agree to pay you (and a survivor or other beneficiary named by you) a fixed annual income for your lifetime(s). The rate of return is very attractive, and varies with the age(s) of the annuitant(s). The older the annuitant(s), the higher the rates. The minimum amount is $5,000.00.

Example: Mr. Fulton is 75 and his wife is 70. They transfer $20,000 to the American Red Cross for a gift annuity, and receive $1,220 annually for life ($20,000 X 6.1%–the annuity rate for their combined ages) some of which will be tax free. They also may claim a generous income tax deduction for the year in which the annuity is established. The full guaranteed payments continue for both of their lifetimes.

If you wish, you may also defer a charitable gift annuity. This is a really great option if you are concerned about having enough retirement income. You can make the gift now, and the Red Cross will pay you (and another beneficiary if you wish) life income starting at any date you specify. The amount you receive depends upon your amount of the gift, your age now, and your age when the payments are scheduled to start. You will also receive an income tax deduction for the year in which you make the gift.

Example: Miss Baker, age 50, transfers $10,000 worth of appreciated stock to the Red Cross for a deferred gift annuity, with payments to begin at age 70. Her rate of return will be 17%, and she will receive $1,700 per year for life. ($10,000 X 17%)

Charitable Remainder Trust

This life income plan is created by transferring assets to a trust that pays you (and another beneficiary if you wish) income for life, as well as providing an immediate income tax deduction. At the end of the trust, the remaining trust assets are transferred to the Red Cross. A bank or trusted advisor can serve as trustee. Once the trust has been created and assets have been transferred to fund it, it cannot be revoked by the donor.

The type of Charitable remainder trust you choose determines your annual payments. Options are:

Charitable Remainder Annuity Trust (CRAT)

The CRAT pays a fixed dollar amount annually for life. The payout percentage is selected at the time the trust is created. You receive a charitable income tax deduction for the year in which the trust is created. Income from the trust is taxed as ordinary income, and in some cases as capital gain or tax-free return of principle.

Example: Mrs. Johnson transfers $100,000 to create an annuity trust that will pay her with life income payments at a 7% payout rate. She will receive $7,000 per year for life. Any income earned by the trust in excess of the $7,000 fixed payment is reinvested.

Charitable Remainder Unitrust (CRUT)

The CRUT pays you a fixed percentage of the fair market value of the trust assets, as revalued each year. You can claim an income tax deduction for the year in which the trust is created. Income is taxed as ordinary income, or in some cases, as capital gain or tax-free return of principle, just as with the Annuity Trust.

Example: Mr. Edwards transfers $100,000 to create a CRUT that will provide him and his wife with lifetime income payments. The trust agreement specifies a payout rate of 6% of the fair market value of the trust assets each year. The first year, he & Mrs. Edwards receive $6,000 from the trust ($100,000 X 6%) One year later, the trust assets are valued at $110,000, and the payment is $6,600 ($110,000 X 6%) If the trust assets are worth $120,000 at the beginning of the next year, Mr. & Mrs. Edwards will be paid $7,200, and so on each year. The payments may increase or decrease, depending upon the value of the assets. If trust income exceeds the stated payout percentage, the excess is added to the unitrust assets and reinvested.

Gift Calculator
To see what income and deductions could be for specific types of Life Income Plans and determine how they might fit into your overall estate planning, click on the link below to connect to our national website. When the page comes up, scroll down to “Calculator”, click on that link, and follow the directions. The calculator is very easy to use!

http://www.redcrosslegacy.org/calc.php

Gifts of Life Insurance and Retirement Plans
If you own life insurance that is no longer needed for its original purpose, please consider donating the policy to the Red Cross. You may claim a charitable income tax deduction for the approximate cash surrender value of the policy, and the proceeds are removed from your estate.

You can also make the Red Cross a beneficiary of an existing policy, or purchase coverage for the specific benefit of the Red Cross. If you wish, you can let the Red Cross own the policy and make tax-deductible contributions to pay the premiums.

Likewise, if you have over-funded qualified retirement plans such as an IRA, 401(K) or Keough Plan, gifts from these plans either directly or through a trust created in your will can help reduce your taxable estate while supporting the work of the Red Cross either now or in the future.

For more information, please contact Debbie Heard at 256-353-4891 or dheard@morglawredcross.org