Planned Giving

Gifts Through Last Will and Testament or Trust

Bequests through your last will and testament and/or distributions through a trust at death are common means of charitable giving. Your estate will reduce its federal estate tax liability (with rates as high as 55 percent), as the estate will receive an estate tax deduction for your charitable gift. The Library will receive stock or property valued as of the date of your death.

Gifts of Appreciated Securities / Stocks / Mutual Funds

The Library greatly appreciates gifts of appreciated securities, stocks, and/or mutual funds, but due to rules and restrictions governing our endowment, we may only accept these gifts in the form of proceeds from sales. In order to make a gift in this manner, please contact your broker and ask him/her to sell the stock and forward the proceeds from the sale to Providence Public Library.

Charitable Gift Annuity

A charitable gift annuity is one of the oldest, simplest and most popular methods of making a deferred charitable gift. A gift annuity is part gift/part investment, where in exchange for a transfer of cash or marketable securities, Providence Public Library will contractually guarantee to pay a specific income to the donor or another beneficiary for his or her lifetime. You can claim a current charitable deduction for that portion of the transfer. A portion of each annuity payment is income tax free.

Charitable Trusts

Charitable trusts can provide income to you and/or your beneficiaries for either a period of years or for the beneficiaries’ lifetimes. At the end of that period or at the death of the last beneficiary, the Library will receive the remainder of the Charitable Remainder Trust. These trusts are funded in two different ways:

The first is that you can set up the Charitable Remainder Trust during your lifetime, or you can have it set up at your death through a transfer under your will. In order to receive a charitable deduction for federal tax purposes for these income-producing plans, the trust must be either a Charitable Remainder Unitrust or a Charitable Remainder Annuity Trust. An especially beneficial way to fund charitable trusts is to use assets, because you can avoid potential capital gains tax that would result from the outright sale of the asset and also can obtain a current federal income tax deduction.

Charitable Remainder Unitrust (CRUT)

• The primary feature of the Unitrust is that it provides for payment to income beneficiaries in an amount that varies from year to year. At inception you, as the donor, determine the fixed percentage to be distributed of at least five percent. Thus, for example, a $100,000 Unitrust with a seven percent pay out in Year One will pay $7,000. In Year Two, if the Unitrust is worth $120,000, the pay out would be $8,400. PPL Foundtion receives the remainder at the death of the last named beneficiary.
• You are allowed a charitable deduction equal to the present value of PPL Foundation remainder interest. This deduction may vary each year. It is based on annual valuations of the principal, income of recipients, and the age in some payout selected.

Charitable Remainder Annuity Trust (CRAT)

• A specified annual payment, based on a fixed percentage of the trust (at least five percent) at the date of inception, paid annually to the income beneficiary or beneficiaries for life. Providence Public Library receives the remainder. There can be no additional contributions.
• For an Annuity Trust, income producing securities or cash are the most suitable for funding.
• An Annuity Trust is a good vehicle for appreciated property capital gains taxes. The fixed payout feature is important for older beneficiaries who have a necessity to know how much will be coming to them every year.

Status of Deductions for CRUT or CRAT

• Charitable Income Tax Deduction – Based upon value of the remainder interest.
• Estate Tax Deduction – The fair market value of true assets is included in the gross estate, but then is fully deductible as a charitable contribution if the donor is the only beneficiary; if there is a surviving beneficiary, then the charitable contribution is based on the survivor’s life expectancy.
• Gift Tax Deduction – The charitable remainder is fully deductible; other beneficiary – gift of life interest.

Charitable Lead Trust

• A Charitable Lead Trust provides for a gift of an income interest from property to Providence Public Library for a term of years of any duration, after which the property either reverts to you as the donor or passes to a non-charitable beneficiary designated by you. The agency must receive an income interest in the form of an annuity or a fixed percentage of the value of the trust property determined annually.
• Charitable Lead Trusts may be established either during your life or through your will.

Life Insurance Gifts

A donor can irrevocably name Providence Public Library as the owner and primary beneficiary of a life insurance policy. The donor is allowed a federal income tax charitable deduction for the lesser of the policy’s fair market value or the future premiums paid. An income tax reduction for contributions to enable the Library to pay subsequent premiums is also allowed. The Library owns the policy and has access to the policy’s cash value. Upon your death, the face value of the policy will not be included in the gross estate, and therefore no federal estate tax will be due on the insurance.

Retirement Plans

If you name Providence Public Library as the beneficiary of your retirement plan, there is no estate tax or income tax on that portion of your retirement funds. You also can name a Charitable Remainder Trust as the beneficiary as long as certain conditions are met. If so, assets remaining in the retirement funds at your death will be distributed directly to the Trust and the Trust would pay income either to your surviving spouse and/or other beneficiaries. If your spouse is a beneficiary, no estate tax is due on the funds. If others are the beneficiaries, then the charitable deduction will reduce the estate tax. In either case, the transferred assets will not trigger income tax. Ultimately, the remainder would be distributed to Providence Public Library.

What will YOUR legacy be?

To learn about how you can create your legacy with PPL, contact Beth Plummer-Ricci, Director of External Relations, at bricci@provlib.org or 401-455-8074.