The Olympic Club Foundation
The Olympic Club Foundation
In estate planning, you first need to think about yourself, your family and loved ones. Once these needs have been addressed, the Internal Revenue Code provides a number of opportunities for you to benefit the nonprofit institutions which you support. The money you divert from flowing to the government in taxes can instead flow to these charitable causes, such as the Olympic Club Foundation. Gifts to the Foundation from Olympians and others have helped increase our grant-giving capacity over the years.
Those who include the Olympic Club Foundation in their estate planning may elect to become a member of the Foundation's "Legacy Circle," further described below.
Request a beneficiary form from your life insurance carrier or from your retirement plan to make the change. Then, if you wish to join the Legacy Circle (and we hope you will), fill out the form (see below) and submit it to us. Of course, you are always welcome to remain anonymous, if you wish.
If you have an interest in supporting the Olympic Club Foundation, the Foundation is willing to help you through this process, working with you and your estate planners. When you are ready, contact us to set up a time to meet and discuss your particular situation. If you have specific ideas as to what Foundation activities you would like to support, such as the Athletes Fund, for example, or wish to make a gift directed to a specific charitable purpose which falls within the Foundation's guidelines, we can discuss this also in more detail. Named gifts are also possible. First, however, please take a moment to read the following brief examples of charitable giving strategies. While this is not a compete list, it should give you some ideas for consideration.
Many donors elect to provide support in the form of a bequest, effective at the donor's death and specified in a will or trust agreement. Such charitable bequests are fully deductible for federal estate tax purposes. The structure of a bequest can take many shapes. Frequently, it is a specific figure or asset. Alternatively, it can be a residual estate - or percentage thereof - after non-charitable bequests to family members are fulfilled. Illiquid assets in an estate - art objects, antiques, real estate, rare books - often are troublesome because high valuations may cause executors to sell these items at depressed prices in order to pay estate taxes. Conveying illiquid assets to the Foundation by bequest eliminates this problem. Your estate planner can draw up wills or trusts with bequests that effectively shelter your assets.
There are two principal ways a donor can use life insurance to support the Foundation. One is to establish a new policy with the Foundation as beneficiary. The other is to transfer an existing policy from its original beneficiary to the Foundation when its original purpose is no longer necessary. Both methods are cost-effective and tax-efficient. Post-transfer premium payments are tax deductible.
Designating the Foundation as a beneficiary of a qualified savings and investment plan such as an IRA, 401k or Keogh plan is among the simpler strategies for reducing income and estate taxes upon death. For donors in higher tax brackets, combined taxes can significantly reduce the market value of these assets upon transfer. The gift can be for either the entire balance or for a specific portion.
Several Olympians have asked us if it is possible to make a gift on a deferred basis so that a spouse or child can receive the benefit of income from an asset for a period of time prior to transfer to the Foundation. The general category for such a gift is the Charitable Remainder Trust.
Charitable Remainder Trusts, while irrevocable, offer a superb way to meet family planning goals and at the same time provide an opportunity to support the Olympic Club Foundation in the future. You can create such a trust during your lifetime or upon your death by transferring assets to a trustee, who under the terms of the trust instrument, invests and manages those assets for the benefit of your beneficiaries.
With a Charitable Remainder Trust, you irrevocably transfer cash, securities, or property to your Trust. The Trust pays you (or your designated beneficiaries) a payout which represents a percentage of the trust assets. The percentage can be a "unitrust" payout or an "annuity" payout. With a Unitrust payout, the trust reflects the market, so your income is variable. Because income increases with trust growth, the Unitrust can provide an excellent hedge against inflation. With an Annuity payout, the payout is based on the value of the assets at the time the annuity trust is established, and it remains fixed for the term of the agreement. At the termination of the Trust (either at the death of income beneficiaries or after a specified term of years), the remainder is transferred to the Olympic Club Foundation as your gift.
When you create a Charitable Remainder Trust, you are entitled to a significant income tax deduction generally equal to the value of the property you contribute less the value of the Unitrust or Annuity payouts to be made to you or to your beneficiaries. The value of the Unitrust or Annuity payouts depends upon the expected term of the trust, the percentage to be paid, and the fair market value of the assets used to fund the trust. The value of the deduction you may claim is limited to a percentage of your Adjusted Gross Income (AGI).
When the Unitrust or Annuity interest ends, the trust terminates and the principal is available for the use of the Olympic Club Foundation.
A Charitable Lead Trust can be described as a mirror image of the Charitable Remainder Trust. During the term of the Charitable Lead Trust, an annuity or unitrust amount is paid to the charity, and upon the expiration of the term the remaining assets of the trust are paid over to the non-charitable remaindermen - usually the donor's children. Upon funding a Charitable Lead Trust, the donor generally does not receive an income tax deduction. However, the amount of the gift to children is reduced for gift tax purposes by the value of the annuity or unitrust interest given to the charity. The longer the trust term, and the higher its payout rate, the greater the gift tax savings. Further, future appreciation on the contributed assets is not subject to further gift or estate taxes when the trust terminates. This is an excellent strategy to enable a Trustor to save on gift and estate taxes while benefiting the Olympic Club Foundation.
The giving strategy called "Life Estate" allows the donor to transfer ownership of real estate - a home or even a second home (including condominiums and cooperatives) - to the Foundation while retaining use of the real estate for the life of the donor and spouse. The benefit is that an immediate income tax deduction is earned, which would not be the case if the gift were made in the form of a bequest.
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