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Gifts Through Your Estate

A Bequest in Your Will

By remembering Lawrence Hospital Center in your will, you can help to ensure Lawrence's future ability to serve the healthcare needs of the community. There are many ways to remember Lawrence Hospital Center in your will.

  • You can leave a percentage of your estate, or of the residual estate after providing for family members and friends.
  • You can leave a set dollar amount.
  • You can leave a particular asset (e.g., government savings bonds, publicly traded securities, business interests, real estate or a collectible).

All bequests to Lawrence Hospital Center are completely deductible for estate tax purposes. This can substantially reduce your estate taxes.

You can also name Lawrence Hospital Center the contingent beneficiary so that Lawrence is "second in line" in case the primary beneficiary you have named predeceases you.

When your attorney draws up your will, Lawrence Hospital Center should be designated as:

Lawrence Hospital Center, incorporated in the State of New York and located at 55 Palmer Avenue in the Village of Bronxville, Town of Eastchester, County of Westchester.
Tax ID Number: 13-1740110

Your Revocable Living Trust

If you have established a revocable living trust, you can name Lawrence Hospital Center a beneficiary of assets remaining in the trust at the time of your death. You can designate Lawrence the beneficiary of a percentage of trust assets, a particular asset or a set dollar amount. Amounts received by Lawrence are fully deductible for estate tax purposes.

Gifts of Life Insurance

The proceeds of your life insurance policies will pass directly according to the beneficiary(ies) you have designated on the beneficiary designation form provided by your life insurance company. You can name Lawrence Hospital Center the beneficiary of all or part of the proceeds of any term or cash value policy. Life insurance proceeds received by Lawrence are completely deductible for estate tax purposes. You can also name Lawrence a contingent beneficiary so that Lawrence receives the proceeds if the primary beneficiary you have named predeceases you.

If you irrevocably donate the insurance policy itself to Lawrence Hospital Center, rather than simply naming Lawrence as the beneficiary, you will also get an income tax deduction. The deduction would be for the lesser of your cost basis or the value of the policy. If your policy is not fully paid up, you may make tax deductible contributions to Lawrence to cover future premium payments.

Your IRAs and Qualified Retirement Plans

Assets from your IRA or qualified retirement plans pass directly upon your death to the beneficiary(ies) named on the beneficiary designation form provided by your plan trustee or custodian. Since these plans may represent a significant portion of your estate, it is important that these forms be filled out carefully and reviewed frequently.

Lawrence Hospital Center can be named a beneficiary of assets remaining in an IRA or other "account type" retirement plan (e.g., 401(k), 403(b), thrift savings plan, profit sharing plan). Lawrence can be named the sole beneficiary, a beneficiary of a percentage of the plan assets or a contingent beneficiary in case you are predeceased by a loved one. If you are married, you may need your spouse's consent to name Lawrence Hospital Center as a beneficiary of a qualified retirement plan. IRAs and qualified retirement plans can also be used to establish a charitable remainder trust or charitable gift annuity to provide income to a surviving loved one after your death. (See "Providing for Surviving Loved Ones").

Tax Benefits: Many advisors consider traditional IRA or qualified retirement plan assets to be the wisest assets to leave to charity because they are taxed more heavily than other assets if left to heirs, but are not taxed at all if left to charity. These assets are not only potentially subject to estate tax if left to individuals other than your spouse, but are also subject to income tax as distributions are made to your heirs. Both taxes are completely avoided if these assets are left to charity.

Special Charitable IRA Rollover Opportunity Extended to 2008 and 2009

The popular charitable IRA rollover provision of the tax law that expired December 31, 2007 has just been extended to 2008 and 2009. So, if you are 70½ or older, you can once again request that your IRA trustee/custodian make tax-free transfers of up to $100,000 per year directly to qualified charities like Lawrence Hospital Center. A great advantage of this provision is that amounts distributed to charity count toward your required minimum distribution for the year. So, if you have not yet taken your required minimum distrribution for 2008, you can roll part or all of that distribution directly from your IRA to Lawrence Hospital Center and not recognize taxable income on our federal income tax return for the amount transferred. No income tax deduction is allowable, but not paying tax on otherwise taxable income is equivalent to receiving a charitable income tax deduction. We would be pleased to provide you with further information and a sample letter to send to your IRA trustee/custodian requesting that a qualified charitable distribution be made to Lawrence.

Providing For Surviving Loved Ones

Providing for charitable organizations and for surviving loved ones does not have to be an "either-or" proposition. There are three ways you can provide for surviving loved ones through legacy gifts to Lawrence Hospital Center. They all provide estate tax savings. Through these techniques, you can provide surviving loved ones with:

  • An income stream for life or a term of years
  • A future inheritance at a designated time
  • Use of your personal residence.

Providing An Income Stream to Surviving Loved Ones

Assets from your estate can fund a charitable remainder trust or a charitable gift annuity that will provide an income stream to one or more surviving loved ones. Either arrangement can provide income to your beneficiary(ies) for life. A charitable remainder trust can also be structured to provide income for a set term of years. This can be an ideal way to provide an extra cushion of support for your spouse, a sibling or a close friend. It can also enable you to provide an adult child or other individual with an income stream that will last a lifetime rather than a lump sum inheritance that can be spent all at once. After the lifetime(s) of the beneficiary(ies) or term of the trust, the principal would be used by Lawrence.

If you are providing for your spouse and want to include a provision allowing the invasion of principal, another arrangement called a QTIP Trust would provide this flexibility.

Estate tax benefits: Estate tax would be completely avoided on a charitable gift annuity, charitable remainder trust or QTIP trust established only for your spouse. Estate tax would be reduced if a charitable gift annuity or charitable remainder trust is established for other individuals.

Estate Assets That Can Be Used: You can establish a charitable gift annuity or a charitable remainder trust for a surviving loved one with assets passing through your will or living trust. You can also fund these arrangements using death benefits of a life insurance policy or assets remaining in your IRA or qualified retirement plans. No income tax would be payable on the transfer of retirement plan assets after your lifetime to the charitable remainder trust or to Lawrence Hospital Center for a charitable gift annuity.

Providing a Future Inheritance to Children or Grandchildren Through a Charitable Lead Trust

Suppose you want your children, grandchildren or other heirs to receive an inheritance, but not until they reach a certain age. Or, you want to reduce gift or estate tax on the transfer of assets to your heirs.

You can establish a charitable lead trust now or through your will that would provide an income stream to Lawrence Hospital Center and perhaps other charities for a period of time (measured by a term of years or lives). When the trust terminates, principal would be distributed to your heirs, at vastly reduced gift or estate tax.

Two types of Charitable Lead Trust: A charitable lead annuity trust would pay a set dollar amount each year to charity (your chosen percentage of the original trust value). A charitable lead unitrust would pay your chosen percentage of the changing trust value each year. You choose the percentage payout for either type of trust.

Gift and Estate Tax Savings: If you establish your charitable lead trust now, you get a gift tax deduction. If the trust is established through your will, you will get an estate tax deduction The size of your deduction will depend on the type of charitable lead trust you create, the term and payout of the trust and a certain IRS discount rate that fluctuates monthly.

If you establish a charitable lead trust for your grandchildren, generation skipping transfer tax will come into play. However, this tax can be reduced or eliminated entirely if part or all of your $2 million generation skipping transfer tax exemption is applied to the trust.

Example

Mr. Ruccio establishes a $500,000 charitable lead annuity trust to pay 6% to Lawrence Hospital Center for 20 years, after which his son and daughter will receive the principal. This entitles him to a gift tax deduction of $4. Only $48,675 is, therefore, considered to be a taxable gift to his children, even though they will get the entire trust principal (including any appreciation in trust value) when the trust terminates. No immediate gift tax is due, since even with this taxable gift of $48,675, Mr. Ruccio has still not used his entire $1 million gift tax exemption.


Providing Your Loved Ones with Use of Your Personal Residence, Vacation Home or Farm

You may leave your personal residence, vacation home or farm to Lawrence Hospital Center, reserving the right for your spouse and/or other loved ones to use your property for life or a term of years. Estate tax will be completely avoided if use is reserved for your spouse and reduced if use is reserved for others. The individuals(s) for whom you reserve the right to use your property would be responsible for insurance, property taxes and maintenance.