What is a planned gift to the Ice Age Park & Trail Foundation?

Planned giving is the thoughtful decision to arrange a major gift to the Ice Age Park & Trail Foundation (IAPTF). A special satisfaction comes from making a gift to a cause or organization that is particularly meaningful to you. A planned gift forms a lasting tribute, celebrating your life and your wish to share its rewards with present and future generations. When you love the land and appreciate Wisconsin's natural heritage, it's only fitting that you want to see these resources left as a legacy for the future.

A planned gift usually involves a financial or legal document such as a will, life insurance policy, trust or annuity. Although most planned gifts are arranged now and received at some future time, planned giving also includes outright gifts of cash and other possessions. Most planned gifts are made from assets, but some donors make a pledge and fulfill their planned gifts through serial giving over time. Charitable donations might include cash gifts, appreciated securities, life insurance policies and real estate.

Examples of planned giving vehicles:

• Outright gifts
• Bequests in wills
• Charitable remainder trusts
• Charitable gift annuities
• Charitable lead trusts

A planned gift can often provide benefits to the donor such as income tax savings, avoidance of capital gains tax, estate taxes savings and income to beneficiaries. In some instances, a gift can be structured so that the donor retains the income for the lifetime of one or two persons. Because there are so many different planned giving combinations, a plan can be tailored to meet the your needs. We encourage you to talk with your financial advisor and lawyer when considering planned giving options. NEVER enter into any form of planned giving until you have consulted with independent, qualified professionals.

The IAPTF has benefited from several bequests from individuals who have provided for us in their wills. Your planned gift to the IAPTF can help us reach our long-term vision of protecting and maintaining a continuous thousand-mile trail while providing vital financial stability for the Foundation. The needs of the Foundation are assessed annually, and your unrestricted donations to the Foundation will be directed to the area where they are most needed, though your gift can also be earmarked to support a specific activity or goal of the Foundation that is of particular interest to you.

Where there’s a will, there’s a way to leave a lasting gift for the Ice Age Trail.

Preparing your will is the best gift you can give your family and loved ones. It is a thoughtful document expressing your wishes by directing the distribution of your assets and ensuring the financial security of your family when you pass away.

Your will can also provide a meaningful and lasting gift to the IAPTF through a bequest. Bequests are desirable because a significant gift can be made while the value and availability of the assets are not diminished during the donor's lifetime. Bequests to the IAPTF or other charities are entirely free from federal estate tax and may offer substantial estate tax savings.

A charitable gift by will may be either restricted or unrestricted. The IAPTF is especially grateful for unrestricted bequests that can be directed by the Board of Directors based on the Foundation’s changing needs, priorities and strategies. Although the Foundation has received sizable bequests in the past, such gifts do not have to be large to make a worthwhile impact. If you wish to include the Ice Age Park & Trail Foundation in your plans but already have a will that meets all other wishes, your attorney can prepare an amendment document called a codicil.

There are several ways to name the IAPTF as a beneficiary in your will. Bequests can be for a specific dollar amount, but may also include real estate, securities or life insurance policies. Gifts by will can also direct a portion of your estate or your residual estate after meeting the needs of your heirs and the payment of other bequests.

The sample language below is intended as a guide only. A will should always be prepared with assistance of a legal advisor to be sure it meets your individual estate planning requirements. IAPTF staff and counsel would be delighted to be informed of your plans and help in any way to assist you.

Sample Bequest Language

Specific Amount: "I give to the Ice Age Park and Trail Foundation, Inc., a non-profit charitable organization located in Madison, Wisconsin, the sum of $___________ to be used in such manner as its Board of Directors determines."

Specific Property: "I give to the Ice Age Park and Trail Foundation, Inc., a non-profit charitable organization located in Madison, Wisconsin, all of my right, title and interest in the following described real estate (insert legal description of land) to be used by the Foundation where the need is greatest."

Portion of Estate (Restricted): "I give to the Ice Age Park and Trail Foundation, Inc., a non-profit charitable organization located in Madison, Wisconsin, _______% of my estate to be used to be used by the Foundation for the direct and indirect costs of acquiring land or easements to complete the Ice Age National Scenic Trail."

Residual Estate: "I give to the Ice Age Park and Trail Foundation, Inc., a non-profit charitable organization located in Madison, Wisconsin, the rest and residue of my estate to be used by the Foundation where the need is greatest."

Make a gift today and receive income for life

A charitable remainder trust lets you leave a meaningful gift to the Ice Age Park & Trail Foundation, as well as realize potentially significant tax benefits and receive income from the assets.

Charitable remainder trusts afford donors a tremendous opportunity to provide significant financial support for charitable organizations like the IAPTF while assuring the donor a lifetime income. Charitable remainder trusts are popular arrangements for integrating charitable giving while offering great estate planning flexibility.

Creating a Charitable Remainder Trust (CRT)
To create a charitable remainder trust, the donor irrevocably transfers money, securities or both to a Charitable Remainder Trust. The trust pays income to one or more beneficiaries — often the donor or the donor and the donor's spouse — for life or for a term of up to 20 years. When the trust ends, the remaining assets become the sole property of the IAPTF.

Income Tax Deduction
If the donor itemizes, they are entitled to receive a charitable tax deduction on their income tax return for the year the charitable remainder trust is created. The deduction is based on the value of the charity's remainder interest as determined by official Treasury tables and considers a number of factors, including the ages of the income beneficiaries (or the term of years), the payout rate and the value of the assets contributed to the trust.

Additional Benefits of Appreciated Securities
There is no capital gain when a donor transfers appreciated securities to fund a charitable remainder trust. A charitable remainder does not incur any tax when it sells the appreciated securities. The distribution income that beneficiaries receive from a CRT is taxable. The trust is required to distribute ordinary income first, then capital gain, followed by tax-exempt income and finally (non-taxable) principal.

Estate Tax Savings
A CRT also can also provide significant estate tax savings.

Donor or Beneficiary Income from a Charitable Remainder Trust
The type of charitable remainder trust determines the amount it pays each year to income beneficiaries. With either type of CRT, the minimum payout rate is 5%.

Charitable Remainder Annuity Trust
Pays a fixed dollar amount each year. Example: If John and Sally created a 5% annuity trust funded with $200,000, they would receive $10,000 each year during their lifetimes.

Charitable Remainder Unitrust
If instead, John and Sally created a 5% Charitable Remainder Unitrust, they would receive $10,000 in the first year (when the value of the trust is $200,000), and they would receive 5% of whatever the trust's value is in each subsequent year. That $200,000 value, of course, could increase or decrease, depending upon how the assets are invested.

Recently, the following illustration was presented for consideration by a donor:

When selecting a payout rate for a unitrust, it typically makes sense for the donor to choose a low payout rate, so that they enjoy the benefits of the tax-free appreciation of assets within the trust.

Assume that John and Sally (ages 58 and 54 years old) live for 33 more years. During that time, the trust enjoys a 10% total annual return. John and Sally would receive $800,000 of income (before tax) from a 5% unitrust, and the IAPTF would receive $1 million when the trust ends.

In contrast, a 6% unitrust would generate $795,000 of income for Sally and John, and result in assets to Ice Age Park & Trail Foundation of $730,000. In this case, the lower payout rate is better for both the donor and the IAPTF.

Support the Ice Age Trail with outright gifts of stock

Many people have stocks that have significantly appreciated over the last 10 years. Whether they own one share or one hundred shares, wise investments are paying off for individuals and the charities they support. One drawback of these great increases is federal capital gains taxes. The more your shares increase in value, the more taxes you have to pay. This is where the IAPTF can be of service to its members. IAPTF can help you avoid paying federal capital gains taxes.

By contributing long-term appreciated publicly traded securities to a charity, you may be able to deduct their full fair market value for your federal taxes. You may deduct up to 30% of your adjusted gross income for gifts of securities. Depending on your overall tax plan, you may have five years to carry over any excess deduction that may not apply the year you make the gift. Under certain conditions, you may elect to claim only the cost basis of the gift for the deductible amount and claim up to 50% of your adjusted gross income as a deduction.

Also, you may avoid paying federal capital gains tax. This is possible because you give away any capital gain you may have owed to a charity. 501(c) 3 charities like the Ice Age Park & Trail Foundation typically do not pay capital gains taxes. Therefore, you may make a substantial gift to a favorite charity, while still incurring some possible federal tax benefits to yourself. We suggest you consult your attorney or certified financial planner before making any stock gifts or decisions regarding your overall tax plan.

Example of an Outright Stock Gift
Joe is a member of the Ice Age Park & Trail Foundation at the $50 level. He feels strongly about our mission, but he is concerned about making a larger annual gift. A few years ago, Joe purchased 100 shares of publicly traded ABC Stock at $4/share ($400). Today, Joe's ABC stock has appreciated to $10/share ($1,000).

The difference between what Joe paid for stock and what that stock is worth today is called capital gain ($600).

The federal government imposes a 20% tax on capital gain called a capital gains tax. Joe would owe $120 in federal capital gains tax (20% of $600) if he sold the stock today.

If Joe donates part or all of his ABC stock to the Ice Age Park & Trail Foundation, he may receive a charitable tax deduction for its fair market value of $1,000.

Benefits to Joe
He may qualify for a larger charitable tax deduction than his $50/year gift would generate. He can feel good about donating a substantial gift to continue the efforts of his favorite charity, as well as the joy of making a gift now rather than through his estate.

Benefits to Ice Age Park & Trail Foundation
The Foundation receives a larger one-time gift to continue to support our Ice Age Trail volunteers.

For more information or to make a stock gift to the IAPTF, contact Ken Kruger or Daniel Gundrum at Robert W. Baird & Co., (414) 765-3537. Mention Account no. 4464-2597 and DTC no. 0547.

Many thanks for considering the Ice Age Park & Trail Foundation as you make important plans for your financial future. We encourage you to consult your financial advisor or attorney when considering your planned giving options.