Frequently Asked Questions

• Why do I need a Will?

  At your death, a Will serves as a road map for your personal representative to distribute your property and assets to family, friends, and charities. Without a Will (as part of your estate plan) you will not control how your assets are distributed. Instead, the laws of the state in which you reside will determine how assets are divided – which may not be the way you would have wanted.

• What is a bequest?

  A bequest is a gift in your Will to a specific recipient. A charitable bequest is a transfer of assets or property at death by will to a nonprofit organization or organizations for charitable purposes. You can leave either a specific dollar amount or a percentage.

• How do I make a charitable bequest to ADF?

  The following language may be helpful to you and your attorney when drafting your Will to include a gift for ADF:

  “I give, devise, and bequeath {choose one of the following: the sum of / percentage of / or residue of my estate} to the Alliance Defense Fund (tax identification number 54-1660459), a not-for-profit corporation incorporated in the State of Virginia, with principal offices located in Scottsdale, Arizona, to be used for general purposes.”

  If you need an estate planning attorney to assist you, we are happy to provide you with a referral. Please contact the Gift Planning Team at giftplanning@telladf.org and we will provide you with additional information.

• Are there gifts that will pay an income back to me?

  Yes, both a charitable gift annuity and a charitable remainder trust can pay you an income for a specified period of time or the rest of your life. The charitable gift annuity payments are guaranteed for the rest of your life. The charitable remainder trust payments vary according to market fluctuations and may invade the trust’s principal to make payments.

• What is a charitable gift annuity?

  A charitable gift annuity (CGA) is a contract between you and a charitable organization. In return for your gift, the charity agrees to pay you (and another annuitant if you choose one) a fixed amount (based on your age) for the rest of your life. The benefits of a charitable gift annuity are that you make a one-time gift, receive a charitable tax deduction, and receive a fixed amount of income for your lifetime.

• What are the tax advantages of a charitable gift annuity?

  With a gift annuity, you can claim part of what you contribute to fund the annuity as a tax deduction, and part of the income you receive each year is tax-free. Additionally, if you fund the annuity with an appreciated asset, such as stock, you also escape some of the capital gains tax that you would owe if you had sold the asset.

• What is a charitable remainder trust?

  A charitable remainder trust holds gifts that ultimately will benefit a charity. You and the trustee agree at the time the trust is established on a type of payment to you: either an annuity payment representing a fixed dollar amount or a unitrust payment representing a fixed percentage of the trust assets, which is revalued annually. At your death, the assets remaining in the trust are transferred to the charities you designated when you established the trust.

• What are the tax advantages of a charitable remainder trust?

  You can claim a federal income tax deduction. Your estate may enjoy reduced probate costs and estate taxes.

• Can the income from a charitable gift annuity or a charitable remainder trust benefit both my spouse and me for our lifetimes?

  Yes. Income gifts can be established to support the surviving spouse for his or her lifetime.

• Does the income from one of these gifts have to go to me, or can someone else, like my mother, receive the income?

  Income gifts can be very useful to provide support for a person dependent on you, such as a parent. You receive the charitable deduction for making the gift, but the income recipient declares the income for tax purposes. Since a parent is likely in a lower tax bracket, there may be less tax owed than if you received the income and used it to provide for her support.

• Are there any benefits to donating stock to fund a charitable gift annuity or a charitable remainder trust?

  Donating stock, instead of cash, may increase your income. You may own stock that has greatly appreciated in value, but pays only a small dividend. By funding a charitable gift annuity or a charitable remainder trust, you defer paying the capital gains tax, you realize a tax deduction, and you could receive a much greater income than you realized from the dividends.

• Is stock the only type of appreciated asset I can use to make a gift to support ADF?

  No. ADF will gladly accept gifts of land, manufacturing/office buildings, apartment buildings, limited partnership interests, cars, art, boats, planes, etc. Please contact the Gift Planning Team at giftplanning@telladf.org to discuss the various options regarding giving non-cash assets.

• Is life insurance a good way to make a gift?

  Yes. You can give a life insurance policy to charity and take an income tax deduction for this gift, as well as a deduction for any additional gifts to the charity, to allow it to pay any ongoing premiums. Alternatively, you can retain ownership of the policy and just name the charity as beneficiary, though no income tax deduction is available for this approach. In both cases, there are no estate taxes on the life insurance proceeds.

• How can I use my IRA or other retirement plan to make a gift to ADF?

  The combined impact of estate and income taxes can, in some cases, be 70 percent of the assets in a retirement plan. However, if you name ADF as a beneficiary of your retirement plan assets, the full amount of the retirement plan assets that pass to ADF will not be estate or income taxed.

• Is there any way I can pass money on to my grandchildren and save on estate and gift taxes?

  A charitable lead trust can be used to pass on assets to individuals other than yourself – for example, your grandchildren. A lead trust pays an income to the charity for a set number of years or a lifetime. Then the trust terminates and the assets can, in this example, go to your grandchildren. Estate and gift tax laws put limits on the amount of property that can be handled this way without incurring the generation-skipping transfer tax (GSTT).

• What are the tax advantages of a charitable lead trust?

  Most people use a charitable lead trust to obtain a charitable gift tax deduction and to reduce the size of their estates. After a number of years of supporting ADF with a charitable lead trust, your children or grandchildren may receive a sizable gift under the trust. Under certain circumstances, you can claim a charitable income tax deduction for the present, calculated value of the amount of income that is paid to ADF.

• Are there other types of charitable gifts I should consider?

  It is always best to consult with us before making a planned gift. We are happy to explain the various types of giving opportunities we offer to our Ministry Friends. You should also seek advice from your attorney and/or financial planner.

Related Information

• Gift Planning Home
• Gift Planning Calculator
• Various Gift Planning Instruments
• Gift Planning Profile
• The Pillars of Freedom Society