Scleroderma Foundation - Michigan Chapter

Why should I make a planned gift to the Michigan Chapter?

Many people want to make charitable gifts but need to do so in a way that helps meet their other personal, family, or financial needs. Planned gifts give you options for making your charitable gifts in ways that may allow you to:

Planned Giving
Planned giving is finding ways to make charitable gifts now or after your lifetime while enjoying financial benefits for yourself. Many scleroderma patients and their families have already made gifts in support of the work of the Michigan Chapter. Large and small, these gifts are so important to the success of our efforts at the Michigan Chapter in order to continue our programs and services to those in the state of Michigan.

While most gifts come in the form of cash, check or credit cards, many donors have found themselves over time considering, WHAT to give as well as WHEN and HOW to structure their contributions. This has enabled them to make more meaningful gifts while also meeting personal planning goals as well.

By exploring the Scleroderma Michigan Chapter’s gift planning options, you will:

The Michigan Chapter knows you want to make the most of what you have by preserving financial security for yourself and your loved ones while you are reaching out and making a real difference in finding a cure for scleroderma and planned giving can help you achieve both of those goals.

If you need assistance with making decisions regarding your planned giving, please contact the Michigan Chapter at (800) 716-6554 or (248) 595-8526. You can also e-mail the Michigan Chapter at MIchapter@scleroderma.org for additional information.

What to Give
A Donation of Cash:
Scleroderma Foundation Michigan Chapter often receives gifts in the form of cash, checks or credit cards. Cash gifts are convenient for many people and are easily recorded through canceled checks and receipts. Remember that it is important to save all receipts to assure maximum tax savings.

Non-Cash Gifts: Enjoy More Savings
Many Scleroderma Foundation Michigan Chapter supporters also choose to make their gifts in forms other than cash. Examples include:

	Securities (stocks, bonds, mutual funds)
	Real estate
	Retirement plans
	Life insurance policies

After considering the properties you own, you may find giving something other than cash to be an appealing alternative for gift giving to the Michigan Chapter. Giving non-cash property enables you to help the Michigan Chapter while conserving cash for other uses and enjoying what may be greater tax savings than those provided by gifts of cash.

If you have non-cash property, such as stocks and mutual funds, that has grown in value, or as they say, appreciated and been held long-term, which is considered to be more than one year, you can generally enjoy larger tax savings from giving such property than from giving an equivalent amount of cash. This is because a gift of appreciated property lets you forgo capital gains tax that could be due if you sold the asset. You are also entitled to a charitable deduction based on the property's current value, including the "paper profits" you have earned since you have owned it.

If you have stock or other property that has decreased in value, you will normally save more in taxes by selling them and giving the proceeds directly to the Michigan Chapter. You may then be able to claim a capital loss on your tax return. You can also deduct the cash proceeds you give as a charitable gift. The result can be to enjoy tax deductions that amount to more than the current value of the asset. This is a wonderful benefit to the donor and the Michigan Chapter.

Charitable Lead Trusts
Make a Temporary Gift & Provide for Your Heirs
The Michigan Chapter wants you to know that there is a way to make a charitable gift using funds that will eventually be returned to you or your loved ones. This is a wonderful solution and remarkably, such a plan exists. It is known as a charitable lead trust.

A charitable lead trust can be used to achieve what might at first seem to be conflicting goals. Consider the benefits of a charitable lead trust for you as the donor and the Michigan Chapter:

There are other gift plans that feature annual income for you or others you choose. Under such plans, when income ceases, any remaining funds are transferred to the Scleroderma Foundation Michigan Chapter. Under the terms of a charitable lead trust, however, the Michigan Chapter receives a gift in the form of payments from the trust that begin immediately and last for a period of time you determine. At the end of that time period, assets remaining in the trust are returned to you or others you designate. One result can be to provide an inheritance for loved ones at little or no after-tax cost.

As you can see, the charitable lead trust can be an especially attractive way to meet multiple personal and charitable planning goals.

A charitable gift annuity is a very flexible way to make a planned contribution. It can be designed to provide a fixed income for life for you and/or others you choose and can be created with gifts of relatively modest amounts.
For example, you can make a gift through a charitable gift annuity agreement for as little as $10,000. Here's how a Scleroderma Foundation Michigan Chapter charitable gift annuity works:

Some donors choose to fund a new gift annuity agreement with the Michigan Chapter each year. Since payment rates increase with age, each gift annuity generally brings larger annual payments.

When property, such as stock, that has increased in value is given for a gift annuity, part of the capital gains tax that would normally be due on its sale can be avoided at the time of the gift, and a portion of the gain can be reported over the annuitant's life expectancy.

The charitable deduction is usually based on the current value of the property, not its lower original cost. The use of appreciated, low-yielding assets to fund a gift annuity can be an excellent way to completely bypass capital gains tax at the time of your gift, benefit from a current income tax charitable deduction, and gain the advantage of reporting a portion of each payment at lower, more positive capital gains tax rates for a number of years.

Your will or living will can be used to not only fill an important role for your family’s security, but it can also be used as a planned giving gift to the Michigan Chapter. You will have a wonderful feeling knowing that a portion of your property will be put to good use after you no longer need it.

A gift made by will or living trust can be simple to arrange. A provision or amendment prepared by your attorney at the time you make or update your will or trust is all that is needed.

This type of planned giving is very popular because they are easy to arrange and may be changed at any time you choose leaving you in total control.

There is currently no limit on amounts deductible from federal gift and estate taxes for charitable gifts made by will or trust, so no tax will be due on assets given in this way. To plan a bequest to the Michigan Chapter, please inform your attorney of your wishes and ask for advice regarding the best form for your gift. This is something you want to plan for today and not put off. You will have peace of mind knowing you have thought ahead for the future rather then left your future unplanned for.

Many people have life insurance or retirement plans with significant balances. In some cases, these assets total more than is needed for a comfortable retirement, and you could end up with heavy estate taxes.

In that case, it may be a good idea to consider using these funds to make charitable gifts to the Michigan Chapter now or in the future. A simple change of beneficiary form may be all that is required for gifts of what remains in your accounts. As in the case of gifts through wills and revocable living trusts, such gifts can be arranged to take place only if loved ones predecease you, or in the event of other circumstances you specify. A retirement plan benefits advisor or your life insurance professional can provide more details regarding these options.

One of the easiest ways to provide a gift to the Michigan Chapter involves naming a charitable beneficiary for any funds that remain in a bank or brokerage account at your death. The gift is arranged by completing a simple P.O.D (Pay on Death) form for a bank account or a T.O.D (Transfer on Death) form for a broker account. Your bank branch officer or financial officer can assist you.

Millions of donors have taken advantage of tax incentives provided by Congress to encourage saving for retirement through contributions to Individual Retirement Accounts (IRAs), 401(k)s, and similar plans.

In addition to income tax savings at the time contributions are made to such plans, the assets in the plans then build tax free over time for future enjoyment.
Amounts held in tax-favored retirement plans are typically not subject to income tax until they are actually withdrawn from the plan by the plan owner or surviving heirs.

You may find that your retirement plan can be a convenient "pocket" from which to make charitable gifts to the Michigan Chapter each year.

If you are over the age of 59½, and can make withdrawals from your traditional IRA or other tax-favored retirement plan without triggering an "early withdrawal" penalty, you may wish to make withdrawals from retirement plans in amounts sufficient to fund all or a portion of your charitable gifts to the Scleroderma Foundation Michigan Chapter. Those over the age of 70½ who are required to take mandatory withdrawals from retirement accounts in excess of amounts needed to fund current living expenses may also wish to make their gifts in this way. This is a wonderful benefit to both the donor and the Michigan Chapter!

Although you will be required to report the income on your tax return, when you itemize your deductions you are allowed a corresponding federal income tax charitable deduction for your cash gifts up to 50% of your adjusted gross income.
If you are able to deduct the full amount of the gift/withdrawal, this can amount to a "wash" for tax purposes and ensure these funds will, in effect, never be subject to gift, income, or estate taxes. You may also benefit from comparable state tax savings.

The Michigan Chapter advises that you should seek assistance from your accountant or other advisor when determining the optimum amount to give from retirement plan accounts under federal and state tax laws.

Charitable Remainder Trusts
For those Michigan Chapter donors considering a transfer of six figures or more, trusts are very flexible planning tools that can be used to accomplish many goals. Some people rely on them to reduce property management chores. Others use trusts to delay distribution of property to heirs on account of their age or for any number of other reasons.

Trusts also allow donors to arrange for their property to first be put to one use, then to another. A charitable remainder trust offers a way to arrange a beneficial gift to the Michigan Chapter while first providing income for yourself and/or others you name.

1.	You, as the donor to the Michigan Chapter, create a trust, drafted by an appropriate professional advisor with the input of a Michigan Chapter representative if desired.
2.	Cash or other property is transferred to the trust to be managed by you or another person or other entity you choose as trustee. The trustee manages the property for you, your spouse, and/or other beneficiaries you choose.
3.	Each year payments are made from the trust to you and/or other beneficiary(ies).
4.	You receive an income tax charitable deduction and may benefit from capital gain tax savings in the year you create the trust.
5.	Payments continue until the trust ends. The trust document specifies the time when this is to occur, such as at the death of the last beneficiary or after a stated period of time.
6.	When the trust terminates, its assets become a gift to further the mission of the Scleroderma Foundation Michigan Chapter. The gift portion is known as the charitable remainder. If you wish, it can be used to create a memorial honoring a scleroderma patient or loved one you designate.

Charitable Reminder Unitrust
A charitable remainder annuity trust is another way to make a financial contribution to the Michigan Chapter while receiving a fixed, regular income. Income from such a trust can be a dependable supplement to other income in retirement years.

Assets can also be achieved for you and/or surviving loved ones. The payments received each year must be at least 5% of the amount originally placed in the trust. A benefit is that you determine the exact amount when your trust is created.
Like the annuity trust, the charitable remainder unitrust provides for a financial contribution you as the donor retain income. But unlike the annuity trust, the income from a unitrust fluctuates with the value of the assets placed in the trust.
You determine the annual payout percentage when the gift is made. Each year this percentage, at least 5%, of the value of the trust assets is paid to you or others you name. When the value of the investments goes higher, more income is received. The income will be less if the value of the assets declines. Additions can be made to this trust, and a tax deduction is allowed for part of each amount contributed.

For those donors of the Michigan Chapter who have reached the limit that can be deducted for contributions to Individual Retirement Accounts (IRAs) and other retirement plans, the charitable remainder unitrust could play a welcomed role in building additional income for retirement years.

The Scleroderma Foundation Michigan Chapter’s Legal Name and Tax ID Number

The Scleroderma Foundation Michigan Chapter’s Board of Directors suggests you use the following language in order to avoid any confusion:
“I give ___________ (specific amount or property, percentage, or residue) to the Scleroderma Foundation Michigan Chapter, having its office at 23999 Telegraph Rd., Southfield, MI 48033 for its general purposes to continue it’s tri-fold mission of support, education and research.” Tax ID Number: 52-1375827

Gifts earmarked for general purposes allow the Michigan Chapter to use the funds where they are most needed.

If you give more than the deductible limits for gifts in any one year, you may "carry over" any remaining deductions and make use of them in as many as five additional tax years

If you have any questions regarding planned giving please contact the Michigan Chapter at: (800) 716-6554 or (248) 595-8526