August is National Make-A-Will Month

Wills are an important planning tool for individuals and families of all backgrounds, regardless of wealth and property. Besides helping to allocate assets, wills can be used to nominate guardians for minor children, name caretakers for pets, write funeral wishes and more. A will can also save loved ones the time, money and stress of lengthy and expensive probate court proceedings.

In addition, one of the easiest ways to support charities like the Wisconsin Farm Bureau Foundation is by leaving a portion of an estate as a bequest in a will. These legacy gifts can have tax advantages for families, can be adjusted as circumstances change and can make a meaningful and lasting difference for future generations.

Other types of planned gifts can also offer benefits to both donors and the charitable organizations they support. By incorporating planned giving into your estate and financial planning, you can maximize your impact while also enjoying potential tax advantages and income benefits. From bequests to charitable trusts, there are a variety of ways to include a philanthropic gift in your estate plans.

Bequests

There are many ways to structure a bequest to a charity through either your will or a living trust. All bequests made to the Wisconsin Farm Bureau Foundation are deductible for estate tax purposes.

Specific Bequest – Allows you to leave a specified dollar amount or a particular asset (stocks, real estate, etc.) to the Foundation.

Residuary Bequest – A “remainder” or a percentage of your estate will be left to the Foundation after all other bequests have been distributed and all debts, expenses and taxes of your estate have been paid.

Contingent Bequest – A contingent gift to the Foundation in the event that your named beneficiary has predeceased you at the time your will is probated.

Retirement Plans and Insurance Policies

Two other very popular ways to make a charitable donation after your lifetime are to name a charity as a full or partial beneficiary of a life insurance policy or retirement plan, such as an IRA, 401(k) or a company pension plan. Naming the Wisconsin Farm Bureau Foundation as the beneficiary after your lifetime avoids all estate and income taxes on the donated assets. To make this gift, you may simply notify your plan administrator or insurance agent of your wish to change the beneficiary. In addition, you may also transfer ownership of your insurance policy to the Wisconsin Farm Bureau Foundation and receive an immediate income tax charitable deduction for the full fair market value of the policy.

Charitable Remainder Trust

A charitable remainder trust allows you to gift cash, securities or real estate while allowing designated beneficiaries, including you or your spouse, to receive a set dollar amount or percentage of the value of the trust income for a term of years or the remainder of their lifetimes. When the term of the trust ends, the remaining assets will be distributed directly to the Wisconsin Farm Bureau Foundation. You will benefit from an immediate income tax deduction for the charitable portion of the gift. In addition, you will not incur capital gains tax on the contribution of property to the trust that has appreciated over time.

Charitable Lead Trust

The opposite of a charitable remainder trust, a charitable lead trust allows you to contribute cash, securities or real estate to the Wisconsin Farm Bureau Foundation that will pay income annually to the Foundation in the form of an annuity or percentage of the value of the trust for a term of years or for your lifetime. When the term of the trust ends, your heirs will receive the remaining trust assets. This is an excellent way for you to see the benefit of your gift while being assured that your family will be taken care of after your lifetime. Only a portion of the trust is considered a taxable gift to your heirs at the time the trust is created and any appreciation in the trust assets will be transferred to your heirs without incurring further gift or estate tax.

Interested in learning more? View our full Charitable Gift and Planning brochure, or contact John Hromyak, foundation director, for more information about supporting the Wisconsin Farm Bureau Foundation at [email protected] | 608.828.5729.

This article is educational and not intended to provide financial or tax planning advice. Please be sure to consult with your financial and tax professionals prior to establishing a planned gift or any charitable transaction.

John Hromyak is the Wisconsin Farm Bureau Foundation Director. He is responsible for strategizing, overseeing and managing the operations of the Wisconsin Farm Bureau Foundation