For over 20 years, Good Shepherd  has been dedicated to tending to the needs of Loudoun's most vulnerable children and families. Through its many services, Good Shepherd provides the guidance, skills, and opportunities necessary for success in life. The children and young people whom we serve not only benefit from the variety of our programs, but also from their quality.

A gift to Good Shepherd will enable us not only to maintain our high level of service to our city, but also to develop new programs and to reach a larger number of fragile children and adolescents. At the same time, a gift to Good Shepherd can also provide substantial income and estate and gift tax savings for you and your family. This pamphlet summarizes the following planned giving techniques for making a contribution to Good Shepherd:

• Lifetime Gifts of Cash or Securities
  
• Gifts of Real Estate
  
• Bequests in Your Will or Living Trust
  
• Designating Good Shepherd as the beneficiary of your retirement plans
  
  
• Gifts of Life Insurance
  
  
• Charitable Remainder Trusts
  
  
• Charitable Lead Trusts
  
• Charitable Gift Annuities

Lifetime Gifts Of Cash Or Securities
A gift of cash or securities (such as stocks, bonds and mutual funds) is the simplest way to make a donation to Good Shepherd. Good Shepherd can use your gift to meet current needs as well as future expenses, and you may be eligible for an income tax deduction for the year in which the gift is made. In most instances, you will be able to deduct the fair market value of your gift, up to 50% of your adjusted gross income (AGI) for gifts of cash and 30% of your AGI for gifts of securities. Any excess deduction that you are unable to use in the year in which you make a gift can be carried forward and applied to future income tax liability for up to five additional years. Moreover, because Good Shepherd is a tax exempt charitable organization, a gift of securities may be especially advantageous if the securities have appreciated in value since you obtained them, as Good Shepherd may subsequently decide to sell the securities and it will not pay capital gains taxes (that you might have otherwise paid) on the proceeds it receives.

If you would like to donate securities that have decreased in value since you obtained them, you will enjoy more tax savings if you sell the securities and donate the proceeds to Good Shepherd. In this way, you may have a loss deduction to offset any capital gains on other sales of appreciated property plus you will be entitled to a charitable income tax deduction for the full value of your gift.

Gifts Of Real Estate
If you make an outright gift of real property, including a residence, vacation home, undeveloped land, commercial property or a farm, and you have held the property for at least one year, you may be eligible for an income tax deduction equal to the fair market value of the property on the date of your gift, and you will avoid paying capital gains tax on any appreciation on the property.

You can also retain lifetime enjoyment of your personal residence, vacation home or farm by making an irrevocable gift of the property to Good Shepherd, subject to your retained right to use the property during your lifetime. During your lifetime, you could continue using the property and would enjoy any income generated by the property, and you would also be responsible for payment of certain expenses such as real estate taxes. Upon your death, the property would go to Good Shepherd. The tax benefit of this type of transfer is that you will be entitled to take a current income tax deduction equal to the actuarial value of the future remainder interest that goes to Good Shepherd upon your death, and the property will not be included in your taxable estate.

Bequests In Your Will Or Living Trust
Leaving a bequest to Good Shepherd through your Will or living trust allows Good Shepherd to continue to provide valuable services for future generations. You can give a specific asset, a dollar amount, a percentage of your estate or the balance of your estate, after the payment of taxes, expenses and any other bequests that you make. You may also want to consider naming Good Shepherd as a contingent beneficiary of your estate or of any trust created by you in the event that your named beneficiaries fail to survive you (or are not alive when any trust created by you terminates). Because these gifts are revocable during your lifetime, they do not qualify for an income tax deduction. They are, however, fully deductible for estate tax purposes and there is no limit on the amount or percentage of your assets which you may donate to Good Shepherd.

Designating Good Shepherd As Beneficiary Of Your Retirement Plans
A gift of a Keogh, IRA, 401(k) or other qualified retirement plan to Good Shepherd can result in substantial tax savings. If you name your spouse as the beneficiary of these plans after your death, he or she will pay income taxes on the required distributions. If you name someone other than your spouse as the beneficiary, such as your children, the distributions are subject to both estate and income taxes. In fact, the combination of estate and income taxes can claim up to 70% or more of the original value of the assets when given to heirs. A gift of a retirement plan to Good Shepherd, on the other hand, is not subject to either estate or income taxes and Good Shepherd can therefore enjoy the full value of the gift.

Gifts Of Life Insurance
If you donate an existing insurance policy on your life which has been paid in full, irrevocably naming Good Shepherd as the policy’s owner and beneficiary, you may be eligible for an income tax deduction for the policy’s present value, an amount roughly equivalent to its cash surrender value.

You can also donate a policy on which premium payments are still outstanding, or purchase a new policy. If you name Good Shepherd as the policy’s irrevocable owner and beneficiary, you may be eligible for an immediate income tax deduction on the policy’s present value, and also for subsequent income tax deductions when you pay the policy’s premiums in future years.

Charitable Remainder Trust

There are a number of ways in which you can make a significant contribution to Good Shepherd while at the same time providing benefits to yourself or other non-charitable beneficiaries and still remaining eligible for tax advantages. One technique available to donors to achieve these results is the charitable remainder trust.

In a charitable remainder trust (CRT), you transfer property to a trustee. The trust may be created during your lifetime or in your Will. Generally, on at least an annual basis, the trustee makes specified payments to one or more non-charitable beneficiaries selected by you (which may include yourself). When the CRT ends, the trustee distributes the trust property to a charity such as Good Shepherd.

The annual payments may be of either a fixed annual amount based on a percentage of the original value of the assets transferred to the trust (an “annuity payment”) or they may vary annually, based on a fixed percentage of the trust’s value as determined on a yearly basis (a “unitrust payment”). You may decide the payout percentage as long as it is between 5% and 50%.

When you create a CRT, you are eligible for an income tax charitable deduction based on a portion of the value of the assets transferred. The size of your deduction depends upon the present value of the remainder interest that passes to Good Shepherd when the CRT ends.

When you make a donation of appreciated property to a CRT, you gain additional tax savings due to the fact that you can defer or possibly eliminate payment of capital gains taxes on the property’s appreciation. The trustee can sell the appreciated assets without incurring tax liability and reinvest the proceeds in higher income producing property.

Example
Donor, age 70, creates a CRT and funds it with securities having a fair market value of $1,000,000 that she acquired more than 1 year ago for $100,000 and which pays nominal dividends each year. The CRT provides that for the rest of her life Donor will receive an annual unitrust payment equal to 6% of the value of the trust property, redetermined each year, and that upon the Donor’s death the CRT property goes to Good Shepherd. Assuming Donor creates the CRT when the applicable rate used to calculate the charitable deduction is 5.6%, Donor would be eligible for a charitable income tax deduction equal to approximately $471,810. The Trustee of the CRT could sell the securities and invest the full $1,000,000 of proceeds in income producing assets, and, in general, only a portion of the capital gains on the sale of the securities would be taxable to the Donor each year, thereby achieving additional tax savings.

Upon the Donor’s death the remaining CRT property will go to Good Shepherd. Even if the CRT assets grow at a rate less than the percentage for calculating the unitrust payment to the Donor each year it is possible that Good Shepherd will significantly benefit when the CRT ends. For example, assuming the CRT assets grow at an annual rate of 5%, if the Donor dies at the end of her life expectancy of 16 years, Good Shepherd would receive approximately $800,000.

Charitable Lead Trusts
In a charitable lead trust (a “CLT”), you contribute property to a trust in which Good Shepherd receives a specified payment from the trust each year for a term of years. Similar to a CRT, you may create the trust during your lifetime or in your Will. When the CLT ends, the trustee distributes the CLT property to non-charitable beneficiaries selected by you (such as your children or other heirs). The payments to Good Shepherd each year may be either annuity payments or unitrust payments (similar to the payments to non-charitable beneficiaries in a CRT).

Charitable Gift Annuities
A gift annuity is an agreement between you and Good Shepherd in which you contribute cash or other assets, and in exchange Good Shepherd agrees to pay you and/or another beneficiary an annual annuity payment. You will be eligible for a charitable income tax deduction for a portion of the total that you contribute to Good Shepherd.

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The members of Good Shepherd’s development staff are happy to discuss any of these planned giving techniques with you or your advisor in greater detail in order to find the best way to satisfy your individual needs and charitable objectives, please call us at (703) 433-2631.