Billings Clinic
Especially For:

Deferred Gifts

Deferred gifts are those gifts that are committed in the present, but received by a charity in the future.

Deferred gifts include:

  • Life Estate Gifts
    Gifts of real estate can be very attractive because of the double tax benefit—an immediate charitable deduction and the avoidance of capital-gain tax.
  • Retirement Plan Assets
    The funds from the IRA or qualified retirement plan that you leave to charity qualify for an estate-tax deduction and are not subject to income taxes because the charity is tax-exempt. Thus, using these assets you can make a significant charitable gift at relatively little cost to your heirs.
  • Life Insurance
    If the original need for which a policy was purchased no longer exists, a gift of the policy can be very rewarding, particularly if it is fully paid up. 

Life Estate Gifts

 Life Estate gifts provide mutual benefits to both the giver and receiver.

A Life Estate arrangement is created with an irrevocable gift of a personal residence, farm, vacation home that you retain full use of for your lifetime. Benefits of a life estate include:

  • an immediate income tax deduction and
  • the ability to continue to live in your house, or operate or lease your farm and retain all the benefits of ownership, even though you have deeded the property to Billings Clinic Foundation. 

Donors remain responsible for maintenance, taxes and insurance.

A Life Estate may help you accomplish your goals of reducing the size of your taxable estate, reducing your income tax liability, yet retaining lifetime use of your property. Above all, you are providing a significant future benefit to Billings Clinic.

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Gifts of a Retirement Plan

It makes more sense than ever to consider using IRAs and other retirement funds such as 401(k), profit sharing, and 403(b) plans to make charitable gifts. You will likely save more taxes when you give to chairty these types of assets than you would if you gave securities, real estate or cash investments. If retirement plan assets are left to your heirs, as much as 70 percent may be lost to taxes.

The funds from the IRA or qualified retirement plan that you leave to charity qualify for an estate-tax deduction and are not subject to income taxes because the charity is tax-exempt. Thus, using these assets you can make a significant charitable gift at relatively little cost to your heirs. All you have to do is name the charity as beneficiary of a portion of your IRA or qualified retirement fund. It can be a percentage, or even the entire amount if you have no heirs. Following your death, that portion of leftover funds will be paid to the charity in a lump sum, totally tax-free.

Planning Pointer: Upon death, it is better to make charitable gifts with IRAs and qualified retirement funds and give your cash, securities and real estate to heirs.

The IRA charitable rollover was extended through the end of 2009. This permits our friends over age 70½ to rollover tax-free from their IRA to charity up to $100,000 per year.

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Gifts of Life Insurance

Life insurance is an asset that is frequently overlooked as a gift possibility. If the original need for which a policy was purchased no longer exists, a gift of the policy can be very rewarding, particularly if it is paid in full.  With a gift of your policy to a third party, the proceeds will be removed from your estate if you live more than three years thereafter, eliminating probate costs.  If you assign ownership of an existing policy to a charity, you’ll be entitled to an immediate deduction and the proceeds will avoid estate taxes.

Planning Pointer: You may also consider using life insurance when you make a gift of another asset (highly appreciated real estate, for example) but wish to replace the value of that asset for your family. Do this by using the tax savings your gift generates to purchase a life insurance policy. This replaces the value of the gift in your estate for the benefit of your family.

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For more information contact: Amberly Pahut, Senior Development Director at apahut@billingsclinic.org


Montana Endowment Tax Credit
The Montana Endowment Tax Credit offers incentives for Montanans who make a planned gift to endowed funds. Learn more.


Location
Billings Clinic Foundation
P.O. Box 31031
2917 10th Avenue North
Billings, Montana 59107-1031
Contact
Email us or call 406-657-4670 or
1-800-332-7156

The Foundation manages over 70 funds to support Billings Clinic and health care initiatives throughout our community.
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