Planned Giving
LEARN ABOUT ALL OF THE DIFFERENT WAYS YOU CAN GIVE
ABOUT LIFE CENTER
Over 100 years ago out of the desire of several Bible believing people in Tacoma formed a church which we now know as Life Center Church. Life Center Church has grown into several campuses and ministries including Life Christian Academy and our senior housing community Life Manor.
Gifts from estates may be used to supplement the church budget, may be directed to important ministries within Life Center, and may be used to help fund community outreach, or fund global mission efforts. This may happen via your planned gift directly to Life Center Church or to Life Christian Foundation by creating an endowment.
ABOUT LIFE CHRISTIAN ACADEMY
Life Center’s school, which offers pre-school through high school, provides quality Bible based education for the purpose of developing world changers who love and serve Jesus. The school’s program includes full curricular, extracurricular, and ministry outreach for students to learn and grow in their faith. The school has over 1,000 alumni spread around the world, each impacting their community.
Planned gifts to Life Christian Academy may provide tuition assistance funds to students needing financial support to fund a Christian education. Or the gift may help provide budget support for faculty salaries, extracurricular programs, or operational funds to support the need for technology or transportation.
ABOUT LIFE CHRISTIAN FOUNDATION
The foundation was created to receive, invest, and disperse funds from gifts for endowments. Each endowment fund gift includes a fund agreement which directs the use of the funds based upon criteria created by the donor of the fund. Endowments provide a continual flow of funds to Life Center or to Life Christian Academy.
Gifts to the foundation designated for endowment may be directed to the church or school general endowment (which supports budget operations) or may be designated for a previously established endowment, or may create a specific new endowment for a defined purpose. This gives a donor several choices as to how they wish to have their planned gift make impact on the church or school. The foundation becomes the means by which the gift is received, invested, and disbursed for the desires of the donor.
WHO WE SERVE
Our ministry serves the South Puget Sound region of Washington as well as mission related efforts around the world. The ministry is a multi-age, multi-ethnic, and multi-focused effort to help people know Jesus and help make Jesus known.
WHAT IS A PLANNED GIFT?
The key word is “planned” in that your key decisions will shape the plan that you wish for your estate. Being a good steward is a part of God’s teaching to His people. The process of creating a planned gift will provide these opportunities:
1. Realize your financial goals and develop a family plan
2. Potentially reduce taxes for you and your family
3. Arrange for a gift to the ministry of your choice
4. Establish a legacy
ABOUT BEQUESTS
A bequest is a financial term describing the act of giving assets such as stocks, bonds, jewelry, real estate or cash to individuals or to organizations through a will or estate plan. Bequests may be made to friends, family members, institutions, or charities. A bequest is generally a revocable gift, which means it may be changed or modified at any time. A bequest may be for a general or specific purpose. Bequests are exempt from federal estate taxes and if you have a taxable estate, the estate tax charitable deduction may offset or eliminate estate taxes, which may result in larger inheritance for your family members.
CHARITABLE BEQUESTS
A bequest is an effective means by which to make a gift to a charitable organization. As a part of an estate plan, the gift will be designated to a charity for the purpose for which you intend. Your attorney will include the proper verbiage to assure that the gift is designated to the receiving organization as well as include any specific desires for the gift.
A charitable bequest may be for a specific dollar amount, a percentage of the estate value, or a defined item or property of value.
WHAT TO GIVE
GIFTS OF STOCK AND BONDS
Your decision to donate appreciated stocks an bonds is an effective way to reduce taxes on appreciated values. In addition, you will receive and income tax deduction for the value of the donation.
GIFTS OF REAL ESTATE
Real estate includes a home, vacation home, land, or commercial property. A planned gift of real estate may help avoid capital gains tax on the sale of the property and gives an income tax deduction based on the appraised value of the gift. Part of the legal process will include you signing a deed executing the transfer of ownership to the charitable organization.
GIFTS OF RETIREMENT ASSETS
Most people will not use all the proceeds of their IRAs, 401K, 403b, or other retirement funds that have been tax deferred when the assets were accumulated. Your planned gift may include gifts of your unused retirement fund and this will help avoid the potential of estate tax on retirement funds. Your family members would also avoid income tax on the retirement assets which were created on a pre-tax basis. A professional tax advisor will give best advice with these decisions.
GIFTS OF CASH
A planned gift involving the transfer of cash to a charitable organization is very simple and becomes a gift that the organization may use upon receiving the gift. The cash gift also allows you to receive a charitable income tax deduction for the gift.
GIFTS OF INSURANCE
In the case of life insurance, you may consider a gift of the policy to benefit an organization that will benefit from the policy provisions. The policy may be one that can be assigned to a new purpose from the original intent. Hereto, you will receive a charitable income tax deduction for the value of the gift. The policy may be cashed in by the organization or it may be held to maturity and will provide benefit at that point. A gift of insurance includes a designation for beneficiary form from the insurance company.
MAKING A GIFT
Your decision to go through the estate planning process and including a gift to Life Center, Life Christian Academy, or the Life Christian Foundation for endowment, includes a team approach. We will do our best to support your efforts with an excellent “advisors” group. This group includes:
Financial planner, Tax advisor, Legal counsel/attorney
A decision to make a planned gift will include creating a fund agreement, which stipulates exactly your wishes for the gift and for the impact that you desire for our organization.
LIFE CENTERED LEGACY
Your planned gift of $10,000 or more will make you a member of our Life-Centered Legacy. With membership you may be recognized on our website and in newsletters about planned giving opportunities. This recognition helps us create additional gifts like yours to benefit Life Center, Life Christian Academy, or Life Christian Foundation.
End of Year Giving
At Life Center, we value all gifts to help and advance our ministry to our community, our mission support work, and our global initiatives to spread the Gospel of Jesus.
As the holidays approach, many people look for ways of combining their desire to help the causes they believe in with their desire to save on taxes. For the charitably inclined, there are strategic ways of giving that can accomplish both goals.
Generally, if you itemize your deductions, making charitable contributions can decrease your tax bill, and since high‐income earners generally pay tax at higher rates, they may enjoy a particularly large tax break. While charitable donations by cash or check are the most common, giving appreciated securities may have attractive tax benefits.
Before undertaking any strategy, consult your legal, tax, or financial advisor to get advice regarding charitable contributions.
Here are 6 strategies to consider that can help you make the most of your giving this year.
1. Give via cash, check, debit or credit card. This is the most common means by which people give to our church ministry.
2. Give appreciated securities, such as stocks, bonds, or mutual funds that have appreciated over time. Most publicly traded securities with unrealized long‐term capital gains (meaning they were purchased more than a year ago and have increased in value) may be donated to a public charity, without the need to sell them first. When the donation is made, the donor can claim the fair market value as an itemized deduction (assuming the total of their itemized deductions exceeds the standard deduction) on their federal income tax return—the amount deducted can be up to 30% of the donor’s adjusted gross income (AGI). Other types of securities, such as restricted or privately traded securities and donations to nonpublic charities, may also be deductible, but additional requirements and limitations may apply.
When the securities are donated, no capital gains taxes are owed because the securities were donated, not sold. The greater the appreciation, the bigger the tax savings will be.
3. Consider establishing a donor-advised fund. A donor-advised fund (DAF) is a program of a public charity that allows donors to make contributions to the charity, become eligible to take an immediate tax deduction, and then make recommendations on their own timetable for distributing the funds from the DAF to other qualified charitable organizations. With charities that have DAF programs, you can make irrevocable contributions that establish a DAF on your behalf.
Establishing a DAF can be a particularly useful strategy for those who are uncertain about charities because it allows you to make a gift and take the tax deduction immediately but doesn't require you to decide on the charities to support with grant recommendations until you're ready. It can also be a great way for charitably inclined individuals to offset a year with unexpectedly high earnings, or to address the tax implications of year‐end bonuses.
4. Over 70½? Consider a qualified charitable distribution (QCD) from an IRA. If you are at least age 70½, have an IRA, and plan to donate to charity this year, another consideration may be to make a QCD from your IRA. This action can satisfy charitable goals and allows funds to be withdrawn from an IRA without any tax consequences. A QCD can also be appealing because it can be used to satisfy your required minimum distribution (RMD).
Generally speaking, QCDs may be useful in situations where the charitable deduction could not be fully utilized—either because your itemized deductions (including the charitable contribution) fall below the threshold of the standard deduction in the first place, or because your charitable contribution is so large that it exceeds the 30% or 60% of AGI contribution limits and must be carried forward.
5. Consider using a charitable donation to offset the tax costs of converting a traditional IRA to a Roth IRA. Converting in a year in which you can claim a large tax deduction, such as a charitable deduction, can be helpful in offsetting the conversion taxes and may give you an opportunity to give to a charity while also reducing your future taxes.
The most essential difference between traditional retirement savings vehicles (whether they're IRAs or workplace plans) and the Roth versions is that with the former, contributions are usually tax-deductible in the year they are made and can grow tax-deferred within the account; the contributions and earnings are then taxed at "the back end" (i.e., upon withdrawal). Roth IRA contributions are not tax-deductible.
Any time you convert a traditional retirement savings account into a Roth, you will owe taxes on any pretax amounts converted. Depending on the amount converted and your tax rate, the taxes on the Roth conversion can be significant.
6. Consider donating complex assets. Donors may also contribute complex and illiquid assets—such as private company stock, restricted stock, real estate, alternative investments, or other long-term appreciated property—directly to charity. The process for making this type of donation requires more time and effort than donating cash or publicly traded securities, but it has distinct advantages. These types of assets often have a relatively low cost basis. In fact, for entrepreneurs who have founded their own companies, the cost basis of their private C-corp or S-corp stock may effectively be zero.
As with other assets, if the asset is donated directly to a charity and the charity then sells the asset, the original owner is, in many cases, able to eliminate capital gains taxes on the sale of the assets, while potentially taking a charitable donation deduction as well.
Thank you on behalf of Life Center ministries for your consideration of an end of year gift. If you have any questions, please call Ross at 253-756-2462.
CONTACT
For additional information or questions regarding a planned gift opportunity, please contact Ross Hjelseth