Q. Why should I give?
A. The Club is a non-profit, 501(c)(3) United Way member agency and relies on the generosity of individuals just like you to fund a wholesome array of cultural, educational and sports programs for young people. As the needs of our community continue to grow, so does the financial resources required to support and sustain our programs well into the future. You can make a difference.
Q. Where does my money go?
A. Your giving to the Mathews-Dickey Boys’ & Girls’ Club goes directly to the support of one of our many wholesome and comprehensive program: Cultural & Health Awareness, Educational Enrichment & Leadership, Sports and Summer Day Camp as describe in Section 1.0.
Q. How can I help?
A. You may help by making a donation or charitable gift in any of the ways described in the tab titled Ways to Support.
Q. Who needs a will?
A. In most cases, those who own property and are concerned about who ultimately receives it need a will. Regardless of your age or financial standing, it is important to take charge of deciding who will one day enjoy the property you have accumulated over your lifetime.
Q. Do both spouses need wills?
A. Yes. Husbands and wives share the same need for making wills, even if much of their property is held jointly.
Q. What if I have a will that no longer meets my needs?
A. Your will should be reviewed periodically and updated to reflect changes in your life — marriages, births, deaths, financial gains or losses and your personal goals. Tax law changes may also prompt a review of your plans.
Minor changes can be accomplished with a codicil, a simple amendment to an existing will. More substantial changes may require the drafting of a new will. Whether the changes are minor or extensive, always consult with your attorney when considering a revision, as handwritten changes may completely invalidate your will.
Q. How much does it cost to make a will?
A. The fees associated with drafting a will can be quite reasonable, especially when you consider that its purpose is to direct the distribution of property you may have worked a lifetime to accumulate. Taxes and settlement costs that can be avoided with a well-planned will can amount to many times the cost of preparing one.
Q. What if I would like to include gifts to Mathews-Dickey in my will?
A. There are a number of ways to combine charitable gifts (also known as bequests) with your estate plans. Gifts can take the following forms:
A specific amount: You designate that a particular dollar amount be transferred to one or more charities.
Specific property: You can designate that a particular asset, such as real estate, artwork or other valuables, be used to fund a charitable gift. Such a bequest should be worded carefully, as the assets you own may change over time.
A percentage: A percentage of your estate can be designated for charitable purposes, thus ensuring that your gifts remain in proportion to other bequests.
All or a portion of the residue: You can provide that charitable gifts be made from what is left after all other gifts to loved ones have been fulfilled.
Additionally, you may include provisions for Mathews-Dickey through beneficiary designations of life insurance proceeds or retirement plan assets that may remain at death.
Q. What is a gift annuity?
A. A gift annuity is an agreement between an individual and a charitable organization or institution. The donor transfers assets and receives fixed payments for the rest of his or her lifetime and/or the lifetime of another person.
Q. Are there tax benefits?
A. Yes. There can be a combination of income, capital gains and estate tax savings. We will be happy to provide you with a complementary illustration.
Q. What determines the size of each payment?
A. A number of factors, including the amount you place in the gift annuity and your age at the time of the annuity’s creation.
Q. Why does my age affect the rate of payment I receive?
A. Part of the amount you transfer is returned to you over your life expectancy, which changes with age. Generally, the older you are when your gift annuity begins, the higher your rate of payment.
Q. Does that mean my payments change from year to year?
A. No, your rate of payment on a particular gift annuity agreement is set when your annuity begins. But if you give for additional gift annuities — as many people do — the rate will generally be higher for annuities in subsequent years.
Q. What if I outlive my life expectancy?
A. The gift annuity agreement requires that payments will be made for as long as a recipient lives.
Q. Are the payments affected by interest rates or economic fluctuations?
A. No. Payments for a particular annuity are never lowered or raised, regardless of changes in interest rates or the national economy. All net assets of the charitable organization stand behind your agreement.
Q. Exactly how can I benefit another person through a gift annuity?
A. You can designate a loved one to receive the payments either with you, instead of you or only following your death. This can result in a double gift — one to the charitable entity and another to a relative or special friend.
Q. Can I give stocks, bonds or other securities rather than cash to fund a gift annuity?
A. Yes. If you give a low-yielding asset to fund a gift annuity, you may also be able to increase your income since a gift annuity may pay more and be taxed more favorably than other income. There can be additional tax benefits if the securities have increased in value because you avoid the tax on a portion of the capital gain in the property.
Q. Will a gift annuity be part of my estate?
A. Not generally. If payments are made to you only, the gift portion goes directly to the charitable recipient, thus avoiding estate taxes and probate costs. Some gift or estate tax may be due if payments are made to a person other than a spouse.
Q. How can I begin a gift annuity?
A. A gift annuity can be created with a minimum of effort. Contact Mathews-Dickey at (314) 382-5952, ext. 234 or via e-mail at email@example.com to request an exact illustration of benefits for a person your age.
Q. What is the difference between an immediate gift annuity and a deferred payment gift annuity?
A. Under the terms of an immediate gift annuity, you transfer assets to a charitable organization in return for fixed payments for the rest of your lifetime and/or the lifetime of another person, if desired. In the case of a deferred payment gift annuity, the payments from the gift annuity start at a date you specify — at least one year in the future.
Q. Can I receive tax benefits?
A. Yes. Because a portion of the amount used to fund a deferred payment gift annuity will be used for charitable purposes, you are entitled to a federal (and perhaps state) income tax deduction in the year you make your gift. When you begin receiving payments from the annuity, part of each payment can be tax-free over your life expectancy.
Q. What determines the size of payments?
A. The amount of each payment is determined by how much is used to fund the deferred payment gift annuity, the age of the future payment recipient(s) when the gift is made, how long the payments are delayed and other factors. Generally, deferred payment gift annuities pay higher rates than immediate payment gift annuities. And the more time between the gift date and the first payment date, the higher the annuity rate will be.
Q. What if I outlive my life expectancy?
A. Payments will be made for as long as a recipient of payments lives.
Q. Can I provide for another person through a deferred payment gift annuity?
A. Yes. You can designate another person to receive payments either with you, instead of you or only following your lifetime. This can be a wonderful way to provide income for a spouse or other loved one in the future.
Q. Why may someone choose a deferred payment gift annuity over one that makes immediate payments?
A. Delaying the start of payments for a period of time may be especially appealing to people who have not yet retired, but would like to supplement their future income once they do. Example: Jane Doe, age 65, would like to make a special gift but is also concerned about planning for her retirement. Through a deferred payment gift annuity, she can make a gift now and receive an immediate tax deduction, while postponing the payments for five years until her retirement, when her need for the income may be greater.
Q. Is the payment rate the same if more than one person receives payments?
A. Annuity payments may be made for the lives of one or two persons. Because the combined life expectancy of two people is typically longer than one person’s life expectancy, the rate of payment will be somewhat lower. Deferred payment gift annuity rates are also affected by the length of the payment deferral period. Rates for one and/or two people are available upon request.
Q. What assets can I use to fund a deferred payment gift annuity?
A. You may fund an annuity with cash, stocks, bonds or other securities. When you give low-yielding assets to fund a deferred payment gift annuity, you are not only entitled to an immediate income tax deduction, but you may also bypass or delay capital gain taxes that would be due if the property were sold. (This special treatment is not generally available if you establish a deferred annuity to benefit someone else.)
Q. Will a deferred payment gift annuity be part of my estate?
A. Not generally. If you are the only payment recipient, the assets used to fund your gift annuity will not be a part of your probate or taxable estate. Some gift or estate tax may be due if payments are made to a person other than a spouse.
Q. Is a deferred payment gift annuity difficult to create?
A. Such a plan can be created with minimum effort. Contact Mathews-Dickey at (314) 382-5952, ext. 234 or via e-mail at firstname.lastname@example.org for a complimentary personalized illustration outlining the benefits for your specific circumstances.
Giving for Income
Q. Who should consider gifts that result in increased income for themselves or others?
A. Anyone who wants to make charitable gifts while also preserving or enhancing personal financial security would be wise to consider such a gift. Gifts designed to accomplish both of these goals can be made in various amounts and are practical for people at a broad range of income and wealth levels.
Q. How does an income gift work?
A. Charitable gifts that also provide the donor with income can be made in several ways.
One popular option is to make a charitable gift while retaining a fixed income. With this type of gift, the amount of income you receive is determined at the time you make your gift and remains the same from that point forward. This option is particularly attractive for those who wish to plan on a definite amount of income that will never change.
Another option allows you to make a gift providing income that varies over time. Income you or a loved one receives from this type of gift will fluctuate each year, depending on the performance of the plan’s investments. This option provides an opportunity for growth in income over time.
Q. How much would my payments be?
A. Payments are usually in the five to 10 percent range, depending on your age, the type of gift plan and other factors. We will be happy to provide you with a complimentary illustration.
Q. How long will I receive payments?
A. Income can continue for your lifetime and/or the lifetime of whomever else you name. Or, in some cases, you may specify that the payments continue for another period of time you determine, up to 20 years. When payments are no longer needed or otherwise end, the remaining funds are devoted to charitable use.
Q. What assets can I use to fund an income gift?
A. You may fund a gift using a variety of assets — cash, stocks, bonds, mutual funds, real estate or other appropriate property.
Q. Are there any tax benefits as a result of such gifts?
A. Yes. Not only can you enjoy a generous tax deduction, you may also minimize, delay, or completely avoid capital gain taxes. Property (such as securities) that has increased in value while you have owned it may be the smartest choice to fund an income gift. In this case, your income tax deduction is generally calculated using the full fair market value of the property at the time you make the gift. You also avoid paying capital gains tax at the time the donated property is sold. We will be pleased to discuss the best giving opportunities for your particular wishes and personal situation.
Q. What if I have personal financial obligations to meet, yet still want to make a gift?
A. A gift that results in additional income for you may allow you to make meaningful gifts and, at the same time, help you achieve personal goals, such as the following:
Educational expenses: If you want to provide money for your children or grandchildren’s education, a gift that features an income stream may be an attractive and tax-efficient option. You can fund educational needs now or in the future while making a charitable gift and enjoying significant tax savings.
Supplement retirement funds: If planning for retirement is high on your list of priorities, an income gift can supplement other retirement plan income while also providing for a charitable gift when you or a survivor no longer needs the income.
Pre-retirement planning: If you are not yet retired, simply postpone income payments until retirement, when the income and your need for it may be greater. Even though you are deferring the income, you still enjoy immediate tax savings.
Take care of loved ones: Do you want to provide financial support for a spouse, parent, child or someone else who depends on you? With a well-planned charitable gift, you can arrange for regular payments that can add to a surviving loved one’s financial security.
Q. What is estate planning?
A. In its broadest sense, estate planning involves making provisions for the present and future management of the property you have accumulated, and deciding how you want it distributed when you no longer need it.
Q. What if I do not make an estate plan?
A. The state where you live will furnish a standard “plan.” Your state’s plan cannot:
Provide for your heirs according to their needs.
Take into account who you would have wanted to be the legal guardian of your minor children.
Provide for special friends or charitable interests.
Q. How do I begin to create an estate plan?
A. A good place to start is with the “4 Ps.”
List the people you would like to provide for in your plans. You may wish to include charitable interests.
List the property you own and any income it produces. Include investments, real estate, retirement plan funds, and life insurance assets, as well as personal property.
Your plans will begin to take shape as you consider how you wish to provide for the people on your list. Study your property list carefully, looking for opportunities to match the needs of each person.
List the planners you will need to help you — your attorney, accountant, financial planner, bank trust officer, etc. Consider asking your most trusted advisor to help coordinate the process.
Q. Is a will the only document needed to complete my estate plan?
A. Not necessarily. There are other ways to distribute property.
Q. Why might I need a plan other than a will?
A. A trust can avoid probate and distribute assets and manage them for elderly persons or for younger heirs until they reach a certain age.
Joint ownership arrangements allow you and others to own property together. Upon the death of one owner, the property passes outside of probate to the surviving owner.
A power of attorney lets you appoint someone to handle your financial affairs if you should be unable to do so. Many people also create a living will, which outlines their health care wishes.
Also review the beneficiary designations of life insurance policies, IRAs and other retirement plans, because your will and other plans may not affect their distribution.
Q. How can I make charitable gifts in my estate plans?
A. You can make gifts from funds that remain after you have first assured your family’s financial security. You can accomplish this through a bequest in your will, a trust gift, naming Mathews-Dickey to receive life insurance or retirement plan proceeds or other charitable designations.
Q. Is there a way I can enjoy tax savings and other benefits from charitable gifts now?
A. Yes! With income gift plans, you can receive payments for life or another specified period while making a charitable gift of assets that remain when you no longer require the payments. Income tax deductions are allowed for such gifts when completed during your lifetime.
If you fund income gifts with securities that have increased in value over the years, you can reduce and/or delay capital gains tax on the assets. It can also be possible to receive payments that are free of tax or taxed at lower rates than other income. You thus enjoy the satisfaction of making a thoughtful charitable gift as well as the benefit of attractive fixed or variable payments and immediate tax savings.
Q. Who should think about giving life insurance?
A. Since many people already have one or more policies, gifts of life insurance can be a convenient option. Policies originally purchased to provide for children, augment retirement funds, protect a home mortgage, or provide for estate taxes may no longer be needed for that purpose.
If your children are grown and financially independent, you have adequate retirement savings and your home is paid for, one or more of your life insurance policies may now be “obsolete.” You can make excellent use of such policies by giving them or the proceeds they will eventually generate to Mathews-Dickey.
Q. How do I go about making a life insurance gift?
A. You can choose from a variety of ways to name Mathews-Dickey as the charitable beneficiary for a life insurance policy you already own. The process can be quite simple:
Primary beneficiary: You can name Mathews-Dickey to be the sole beneficiary of the policy.
Co-beneficiary: You name Mathews-Dickey to share in the proceeds with another charity or with others you choose.
Contingent beneficiary: Mathews-Dickey receives the proceeds only if one or more other beneficiaries have already passed away.
These beneficiary options may be easily changed if necessary, as your circumstances dictate. If you wish, you may instead choose to make an immediate gift of a life insurance policy by making Mathews-Dickey the irrevocable beneficiary and assigning all rights or incidents of ownership to the Club. You may be entitled to an income tax deduction based on the value of the policy or premiums paid.
Q. What if I still need the life insurance policies that I own?
A. Consider taking out a new policy and naming Mathews-Dickey as owner and beneficiary. With this type of gift, the premiums you pay may be deductible as charitable gifts each year. And, by paying affordable annual premiums and reducing your taxes in the process, you establish an eventual gift that may be much larger than you are able to make using other resources.
Another way to give using life insurance is to purchase a policy to “replace” other assets given to Mathews-Dickey. For example, if you make a charitable gift of cash or other property, you might utilize the tax savings to purchase a life insurance policy to benefit your heirs at death. The amount you gave to charity can thus be replaced by the benefits to your heirs from the life insurance policy.
Q. Can you summarize the benefits?
A. The advantages are many. For the donor the benefits include:
Convenience: It is a simple process to change the beneficiary or give all rights to a new or existing policy.
Tax savings: Significant income, estate, and gift tax savings may be available by effectively planning your gift using life insurance.
Privacy: Unlike a bequest in your will, a life insurance policy gift is not a matter of public record.
Flexibility: You can choose whether to name Mathews-Dickey as a beneficiary of a policy that is no longer needed for its original purpose, such as payment of estate taxes. Or you can purchase a new policy specifically for charitable use.
Q. What are the benefits to Mathews-Dickey?
A. For Mathews-Dickey the benefits include:
Size of the gift: Through a gift of life insurance, Mathews-Dickey may receive a larger contribution than would be possible if you gave other assets.
Avoiding probate: Your life insurance gift can be put to work faster because the charitable recipient receives the proceeds of the policy immediately without having to wait for the estate to be settled.
The full amount: Because life insurance gifts are generally not subject to estate taxes or probate costs, Mathews-Dickey receives all the proceeds you designate.
Q. Who should consider giving retirement plan assets?
A. If you have accumulated excess funds in a tax-favored retirement plan, or you are required to make mandatory withdrawals from such plans, you may find this option appealing.
Sharing these assets with charitable organizations like Mathews-Dickey as part of your retirement planning can be a wonderful way to continue a lifelong commitment to helping others.
Q. How can I make charitable gifts from a retirement plan?
A. If you are over age 59½, you are generally allowed to withdraw funds from retirement accounts without triggering an early withdrawal penalty. You report the withdrawal amount for income tax purposes, but are normally allowed an offsetting charitable deduction that can result in no income tax being due.
Special tax benefits may be available for those over age 70½ who wish to make charitable gifts from a traditional or Roth IRA. Check with Mathews-Dickey or your administrator for more information.
Q. How much can I withdraw from retirement plans and give to charity?
A. You are generally allowed to eliminate tax on up to 50 percent of your adjusted gross income (AGI) through charitable gifts of cash. Withdrawals from retirement plans increase your AGI and, along with it, the amount of charitable gifts you can deduct. But if your withdrawal exceeds certain amounts, you may cause other income to be taxed at higher rates.
Q. What if I am required to take withdrawals that I do not need?
A. Consider using all or a portion of the required withdrawal to fund charitable gifts, thus reducing or eliminating taxes that would otherwise be due on the amount withdrawn.
Q. Can directing a portion of retirement assets to charity at death also help save taxes?
A. Yes. Funds remaining in your retirement accounts at death are considered part of your estate and may be subject to state and/or federal taxes. Additionally, any retirement funds that remain after estate taxes may also be subject to income taxes.
Many choose to avoid this potential “double taxation” by using retirement funds to make charitable gifts from their estate. Designating that charitable gifts be made with retirement funds and leaving other assets to loved ones ensures that no estate or income tax will ever be due on any remaining retirement fund balances.
Q. Can I leave assets in my retirement plan to Mathews-Dickey only after other heirs have been provided for?
A. Yes. You can designate that amounts you determine go to your loved ones before any distributions are made to Mathews-Dickey. Or, you can provide for charitable gifts only in the event your spouse or other heirs do not survive you.
Q. Is it possible to ensure an income from retirement plan assets and still make a charitable gift?
A. Yes, you may arrange for one or more persons to receive an income for life or another period of time. At the end of the term you choose, the funds remaining will go to your specified charitable interest. This option can result in significant tax savings while still helping to assure future financial security for heirs.
Q. How do I make a charitable gift from what might remain in my retirement plan?
A. Ask the administrator of your plan for a Change of Beneficiary form. You can then designate one or more charitable interests as a beneficiary to receive all or a portion of your retirement plan assets under conditions you stipulate.
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