What to Do Before Creating or Reviewing Your Estate Plan
Imagine avoiding the hassle of selling a piece of property, with no worry about getting a fair price and at the same time realizing valuable income and estate tax deductions. This can be your reality when you consider using real estate to make a charitable gift to the Wheaton Franciscan Healthcare – All Saints Foundation. Homes, land, office buildings and other types of real estate assets can be used to help further our important work.
Did you know ... donating real estate eliminates the capital gains tax that you would owe if you were to sell it. Also, donating real estate helps lower your tax burden by reducing the size of your future estate.
If you have questions about donating real estate, please feel free to contact All Saints Foundation at 262-687-8653.
Ways to Donate Real Estate
You can donate your property outright, place it in a trust or give it through your will. All of these methods will enable you to enjoy personal financial benefits while supporting our work in a meaningful way. Following are details on the most straightforward way to make such a gift: direct donation of your property. Include Us in Your Will
You can make a gift of real estate in your will. Because a gift in your will is revocable (that is, you can change it at any time during your life), you will not be able to take an income tax deduction during your lifetime, but the property is eligible for a charitable estate tax deduction upon your death. Another option is to bequeath full title to an individual as long as that person survives you. If not, the All Saints Foundation would receive the property.
If you don't need to make a new will now for any reason, ask your attorney to draw a brief codicil for this purpose. The official legal bequest language for the All Saints Foundation is:
"I give, devise and bequeath to WFH – All Saints Foundation, a not-for-profit organization in Racine, WI,
- the sum of $__________________
- or __________________ percent of my estate or the residue/remainder of my estate, to be used for the benefit of the All Saints Foundation in such a manner as the board of directors thereof may direct
- or to (establish or benefit) said program/fund pursuant to a letter of agreement with the Foundation.
Receive Income for the Rest of Your Life
Another approach to donating real estate is to use your property to fund what's known as a flip charitable remainder trust. Such a trust can be set up to make lifetime payments to you or any other recipient you name starting after the property is sold. At your death, your charity of choice receives the remainder in the trust.
When you donate property to a charitable remainder trust, you can benefit in these ways:
- Eliminate up-front capital gains tax on the increase in the property's value since you bought it
- Receive an immediate income tax deduction for the value of the remainder interest
- Receive income from the trust for the rest of your life once the property is sold
- Reduce the cost of probate—the legal process of administering your estate after your death—by eliminating the property from your estate
- Relieve yourself of selling or maintaining your property
- Make a significant gift that we can access after your lifetime
How You Benefit
In addition to freeing you from the costs and responsibilities of ownership, making an outright gift of property that you've owned for more than a year offers these benefits:
- You obtain an income tax charitable deduction equal to the property's full fair market value. This deduction reduces the cost of making your gift and frees cash that otherwise would have been used to pay taxes.
- You eliminate capital gains tax on the property's appreciation.
The transfer isn't subject to the gift tax, and the gift reduces your future taxable estate.
Is This Gift Right For You?
Use this list to see if making a charitable gift of real estate is a good option for you.
- You want to make a significant gift that benefits our the All Saints Foundation today.
- The expenses and obligations of owning your property outweigh the income you receive from it.
- You don't have family members or loved ones who wish to take on the responsibilities or costs of owning your property after you're gone.
- You want immediate income tax relief as well as elimination of capital gains tax on the property's appreciation.
Find Out More
At this level of family and philanthropic distributions, it is especially critical to have a skilled planning team with expertise in finance, law, taxes, and real estate. The benefit of the best advice possible is well worth the cost.
We would be happy to answer any questions regarding charitable giving that you or your advisor may have. Feel free to call All Saints Foundation at 262-687-8653 for a no obligation conversation.
For legal advice, please consult an attorney. References to estate and income taxes include federal taxes only. Individual state taxes may further impact results. Figures cited are examples based on current rates and are subject to change.