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Determine Your Best Gift

How you structure your gift is as important as discovering your passion.  It’s so important, it’s the second step we recommend in creating your philanthropic plan.

Your options are listed below. It is a long list! Some options have great tax benefits, others even pay income to you and your loved ones. You can give now, or give later. Whatever your needs, there is a charitable giving solution for you.

But choosing can be difficult, and often confusing. That’s what we’re here for. Our skilled staff can help you, along with your professional advisors, structure your best gift – one that brings your philanthropic plan to life and benefits your community now and in the future.

The simplest way to give in the future is with a charitable gift in your will, revocable trust or retirement fund. You retain full ownership and control of your assets during your life; the gift comes to the Foundation on your death. There is the added benefit of an estate tax deduction for the value of the gift.  Individuals who have included the Foundation in their estate plans are honored through the Foundation's Legacy Society.

In the case of retirement funds, you would also avoid the tax of up to an astonishing 85 percent that would be due if you left the remainder to your children. Additionally, through December 31, 2011, individuals aged 70 ½ and above may be able to take advantage of a limited-time opportunity to make a lifetime gift of IRA assets.  Be sure to discuss this opportunity with your professional advisors. Please also discuss your plans with Foundation staff to be sure we can fulfill your wishes; our discussion is confidential, and we understand you may change your plans in the future.

By creating a charitable remainder trust with a gift of $100,000 or more, you (and a spouse or a loved one*) can receive income payments for life, or a specific number of years, after which the remaining assets go to your fund at the Foundation to benefit area nonprofits forever. Tax benefits include an immediate income tax deduction and removal of the asset from your estate.
In exchange for your gift of $5,000 or more, you can increase your income and leave a gift to the Foundation with a charitable gift annuity. The Foundation will pay you (and a spouse or a loved one*) income for life, based on your ages at the time of the gift, or you can choose to defer payments to a later time such as retirement. Tax advantages include an immediate income tax deduction, potentially beneficial treatment of the annuity payments, and removal of the asset from your estate.
You can support area nonprofits now and your family later with a charitable lead trust. Your trust pays income to your fund at the Foundation for a period of years and then passes the assets, often appreciated, to your children or grandchildren with minimum or no gift or estate taxes. Lead trusts function best with contributions of $1,000,000 or more.
Another option for gifts of $5,000 or more, the pooled income fund pays a variable income rate based on the market performance of a pool of funds from multiple donors. In low-return years, this means lower payouts to you or your spouse, but more money at the end for your charitable fund.
If you want most of the tax advantages but more income flexibility, consider a charitable QTIP (Qualified Terminable Interest Property) trust. Instead of paying a fixed percentage or amount to your spouse, this trust gives the trustee broad discretion to use principal for unexpected family needs. Upon the death of the last person named in the trust, the remainder goes to your fund at the Foundation.

The Hartford Foundation can accept a gift of a home, vacation home, apartment building, commercial property, or undeveloped land. If you have owned the real estate for more than one year, you will be entitled to a tax deduction for the fair market value of the property and will avoid capital gains taxes. In some cases you can continue to live in the property. Your gift of real estate generally requires a series of reviews, including a visit to the property, qualified appraisal, a preliminary environmental assessment and title search.

* Please consult your tax advisor for tax implications of different beneficiary choices.

 (l-r) Donald Blust, Tom Divine, Edward Dent

In his estate planning, Edward Dent wanted to provide for his partner, Donald Blust. He wanted to minimize the capital gains and estate tax bite into his portfolio, as well as to relieve his partner from the headaches of managing their various assets.

In consultation with the Foundation, Edward’s attorney, Tom Divine, suggested a charitable remainder trust (CRT) funded by the sale of a seldom-used vacation home on Long Island. Edward donated the home to a CRT at the Foundation, which subsequently sold the property. The proceeds of the sale generate lifetime income for Edward and Donald, and will ultimately fund unrestricted grantmaking at the Foundation.

This plan generated an immediate income tax deduction and eliminated significant capital gains and estate taxes for the client. But more importantly, the approach addressed Edward’s concern that his partner’s needs be adequately met even after his own death.

Charitable IRA Opportunity

A federal law* enables individuals to transfer retirement plan assets tax-free to qualifying charities through December 31, 2011.  This extends the provisions enacted through the Pension Protection Act of 2006. 

Take advantage of tax-saving gifts to charity.

Americans over age 70 ½ can transfer up to $100,000 per year from an individual retirement account (IRA) into a charitable fund without first paying federal income tax on that gift. By making the gift now, future estate and income taxes can also be avoided.

Key Points

  • A taxpayer may exclude from gross income up to $100,000 of otherwise taxable distributions from an IRA, as long as they are "qualified charitable distributions" and meet the following criteria [Lori -  please check the bullets here – which are the criteria and which continue the key points]:
    • They are made directly from the IRA trustee to one or more qualified charities.
    • They are made when the taxpayer is age 70 ½ or older.
    • They otherwise qualify for the full charitable contribution deduction (although because the amounts are not taken into income, no contribution deduction is permitted).
  • The total of each year’s qualified distributions will count toward satisfying the taxpayer’s minimum distribution requirements for their IRA.
  • Qualified charities under this law include scholarship funds, designated funds, field-of-interest funds, and unrestricted funds at community foundations. However, donor-advised funds, charitable remainder trusts, supporting organizations and private foundations are not eligible charitable beneficiaries.
  • While no charitable contribution deduction is allowed for the distribution, the donor must nevertheless receive substantiation from the charitable organization.
  • This provision expires on December 31, 2011.

* The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, signed into law on December 17, 2010


“We were able to create economic security now and to feel good about supporting our community for years to come. What a powerful combination.”

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