Ralph Yaeger, Senior Development Officer, Intermountain
While the acronyms associated with any given specialty may save time and ink for experts in that particular field, they rarely provide either meaning or clarity for the layperson. Charitable giving vehicles associated with estate planning are especially notorious in this regard. In the category of charitable trusts, there are the CRT, CLT, CRAT, CRUT, CLAT, CLUT, SCRUT, NICRUT, NIMCRUT, and FLIP CRUT. Charitable annuities are somewhat simpler—there are the CGA and the DGA.
On the other hand, even knowing the full name of the giving vehicle does not necessarily make the situation easier or clearer. For example, NIMCRUT is the acronym for Net Income with Make-Up Charitable Remainder Unitrust. Still confused?
Sadly, all of this complexity helps to fuel the misconception that you must either be rich or dead to be a philanthropist. Nothing could be further from the truth. If you are like a lot of Montanans—folks who have worked hard, saved some money, and planned for the future—you may be encouraged to learn that there are some surprisingly simple ways to make very generous gifts to charity after you pass away.
Here at Intermountain, we frequently tell our supporters that, “in as little as five minutes, you can make a gift that will ensure your current level of annual giving… forever.”
Designating even a small percentage of accumulated assets to the permanent endowment of your favorite charity can be as easy as adding a beneficiary to your life insurance policy or retirement savings account, or adding a one-sentence codicil to your existing will. And because the charity does not receive the gift until after you die, these assets will continue to generate income for you throughout your lifetime.
Here are a few easy ways to make a gift to benefit your favorite charity forever:
- Beneficiary designation of a savings plan through a Transfer on Death (TOD) agreement. A TOD enables you to designate beneficiaries to receive your assets at the time of your death without having to go through probate. You simply specify the percentage of assets each beneficiary will receive. Your assets are automatically transferred to the designated beneficiaries upon your death. Investment firms typically charge a minimal fee for creating a TOD agreement.
- Beneficiary designation of a retirement plan or life insurance policy. Like a TOD, employer-provided retirement plans offer tremendous opportunities to make meaningful gifts of accumulated assets. Designating a percentage to charity upon death can be accomplished in just minutes, and under many plans, at no cost to you.
- A simple bequest. Including a charity in your will can be accomplished by instructing your attorney to add a bequest for a specific amount, or a portion or the residual of your estate. If you already have a will, you can direct your attorney to prepare a codicil or amendment, without revising the entire document.
Again, each of these giving vehicles share a common benefit: None require an immediate contribution of income-generating assets that you may need during your lifetime.
And they are easy! Consider this scenario: You and your spouse are retired. You have two grown children who are gainfully employed and independent. A portion of your annual income is derived from earnings on a $200,000 savings plan you established during your working years. You make a $1,000 gift to your favorite charity annually. You want this to continue—even after you and your spouse pass away. So one day, you set aside five minutes—just five minutes—and complete a TOD for your savings plan that designates just 10% to the charity. It’s that simple. During your lifetimes you and your spouse will receive the income you need. And after, in addition to leaving the bulk of your savings plan to your heirs, your favorite charity—reasonably assuming that it has a permanent endowment that is properly managed to stay ahead of inflation as well as provide a distribution of 5% annually—will continue to receive the value of your $1,000 annual lifetime gift in perpetuity.
It’s that simple.
Ralph Yaeger, Senior Development Officer for Intermountain, was born in Lewistown and spent his early years on the ranch his great grandfather homesteaded in 1880. He is a graduate of Carroll College, and has lived in Helena for more than 40 years. Prior to joining Intermountain, he served as development director for the Montana Community Foundation and the Montana Wilderness Association.