Planned Giving

  • Planned Giving
     

Gift plans create opportunities for both our donors and the American Red Cross. Determining what gift is right for you is just as important as making the gift. There are many options from which you can choose. The correct plan for you balances what you wish to accomplish for yourself, your family, and your charitable interests in your overall estate and financial plans.

Learn about giving strategies that allow you to make a meaningful charitable gift while possibly enhancing your, and your family's, future financial well being.


Bequests

This is one of the simplest and most used methods of making a planned gift – from your estate after your death when you no longer need the assets.

How to include the American Red Cross in my will?

Many of our supporters make charitable gifts by naming the Red Cross as a beneficiary in their wills. The federal government encourages these gifts or bequests, by allowing an unlimited estate tax charitable deduction.

To make a bequest to the Red Cross, the following language will be helpful to your lawyer:

I give, devise, and bequeath to the American Red Cross for the benefit of the Silicon Valley Chapter the sum of ______ (or otherwise describe the gift or specify a percentage of the estate).

There are three ways you can make a bequest:

1

Specific Bequest

You designate a specific dollar amount, specific percentage, or specific property to the American Red Cross.


2

Residual Bequest

My estate will pay all debts, taxes, expenses, and specific bequests. The remaining amount, the residue, will be transferred to the American Red Cross.


3

Contingent Bequest

If all of my beneficiaries predecease me, my estate shall pass in its entirety to the American Red Cross.


When you are a planned gift donor, the Red Cross will honor you with membership in the Legacy Society. If you have already made a plan to give to the Red Cross in your will or estate plan, please contact one of the planned giving officers.

We realize that with your special gift, you consider us to be part of your family, and we want to do our best to keep you informed as to how your gift will be used and to give you the opportunity to tell us of your wishes.


Gift of Retirement Plan

Many individuals today have large qualified retirement plans such as an IRA, 401(k), or Keogh plan. These assets have been growing tax-free for years. Once the owner begins to receive payments from the qualified plans, the distributions are taxed. The plans are also included in the owner's taxable estate. A retirement plan may be an excellent source of funds for making a gift to the American Red Cross. One way to make a gift of your retirement plan is to create a charitable remainder trust through your will. It works like this: Your IRA assets will be transferred to a charitable remainder trust. There is no tax due because the charitable remainder trust is a tax-exempt entity. The trust will provide life income to the beneficiary (for example, your child) with an eventual gift to the Red Cross. The beneficiary will pay income tax on the distributions from the trust. Your estate will receive an estate tax charitable deduction for the value of the Red Cross's right to eventually receive the trust assets.

Charitable Lead Trust

Individuals with very large estates can use a charitable lead trust to benefit the American Red Cross and pass principal back to family members with little or no tax penalty. It works like this: You transfer assets to a trust that provides payments to the Red Cross for a term of years. Then the trust principal goes to your children, grandchildren, or others free of, or at greatly reduced, federal gift and estate tax. (Please note that a generation skipping tax (GST) is imposed on large transfers to grandchildren and others who are more than one generation younger than you.)

Pooled Income Fund

Your gift of money, marketable securities, or both to the American Red Cross's pooled income fund is invested together with similar gifts from other supporters. Each year, you receive your share, which is taxable as ordinary income, of the fund's earning.

Gift of Life Insurance

Some of our supporters no longer need their life insurance that was purchased years ago to provide for children or other family members. If that is your situation, please consider donating the policy to the American Red Cross. You may claim a charitable deduction for approximately the policy's cash surrender value, and the proceeds are completely removed from your estate.

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. 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.

The type of charitable remainder trust you choose determines your annual payments:

Charitable Remainder Annuity Trust

The charitable remainder annuity trust pays you a fixed dollar amount annually for life. The fixed payments are determined by the payout percentage selected at the beginning of the trust and for five subsequent years if you cannot fully use the deduction in the first year. You can claim a charitable deduction on your income tax form the year that you create the trust. The payments you receive are taxed as ordinary income, and in some cases as capital gain or tax-free return of principal.
  • For example: Mrs. Edwards irrevocably transfers $100,000 to create a charitable remainder annuity trust that will provide her with life income payments. Included in the trust agreement is the stated payout percentage of 7. She will receive $7,000 annually for her life ($100,000 x 7%). If income earned by the trust exceeds the fixed payment of $7,000, the excess is reinvested.

Charitable Remainder Unitrust

The charitable remainder unitrust pays you a fixed percentage of the fair market value of the trust assets, as revalued each year. Like the annuity trust, you can claim a charitable deduction on your income tax form the year that you create the trust and for five subsequent years if you cannot fully use the deduction in the first year. The payments you receive are taxed as ordinary income, and in some cases as capital gain or tax-free return of principal.
  • For example: Mr. Edwards irrevocably transfers $100,000 to create a charitable remainder unitrust that will provide him with life income payments. The trust agreement provides that he will receive 6 percent of the fair market value of the assets each year. The first year he receives $6,000 (100,000 x 6%). One year later the trust assets are valued at $120,000, so he is paid $7,200 ($120,000 x 6%). If the trust assets are worth $110,000 at the beginning of the next year, he will receive $6,600 ($110,000 x 6%). And so on each year. If trust income exceeds the stated payout percentage, the excess is added to the unitrust assets and reinvested.

Life Income Gift

How do I establish a life income gift?

Family obligations and the need to provide for retirement, coupled with the high cost of living, make it difficult for many people to consider substantial charitable gifts now. But there is a way to have the satisfaction of making a meaningful lifetime gift without significant sacrifice. In fact, you can get current income tax and financial benefits. It is called a life income gift. You irrevocably transfer some assets to the Red Cross now, and in return, you (and a survivor, if you wish) receive income for life. As a result, the assets are used to carry out our mission.

By making a life income gift to the Red Cross, you will receive the following benefits, in addition to the pleasure of knowing the good work your gift will do. The benefits include:

  • A charitable deduction in the year you make the gift for the present value of our right to eventually receive the assets.
  • You free up appreciated investment to maximize yield, diversify, or both–often without paying tax on the capital gain.
  • Your effective yield is increased by substantial income tax savings.
  • Income can be taxed more favorably in some plans.
  • You unburden yourself of investment concerns.
  • Your probate and estate administration costs may be reduced.

Contact Us

For details on this program, sample rates, and other giving opportunities or if you have already arranged for a bequest or other planned gift, please contact the Director of Gift Planning, Bill Ruettinger, (415) 427-8989 or William.Ruettinger@redcross.org.

Frequently Asked Questions (For Professional Advisors)

1. What is the Federal tax identification number for the American Red Cross Monterey Bay Area Chapter?

The federal tax identification number is 94-2257274.

2. Can the American Red Cross serve as Executor for an estate?

The American Red Cross National Headquarters and local Red Cross Chapters cannot serve as Executor for any estate due to potential liability and conflict of interest issues.

3. What are the ways in which a donor can designate their gift to the American Red Cross Monterey Bay Area Chapter through their will?

A donor can bequeath a sum certain or a percentage of their estate for either specific or general purposes. The gift can be designated to the American National Red Cross and/or a local American Red Cross Chapter.

4. Who can answer the bequest and legacy questions of an executor/trustee?

Please contact the Director of Gift Planning, Bill Ruettinger, (415) 427-8989 or William.Ruettinger@redcross.org.