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Planned Giving

Make a Gift through Your Will or Trust, Retirement Funds, Gift Annuities, or Insurance Policy
 

You can support the ministries of Grace Cathedral while providing lifetime income to yourself and heirs through a Planned Gift.

Planned giving is attractive for many reasons. It may allow you to make larger gifts than you otherwise could out of your current assets. Depending on how a planned gift is set up, it may also let you receive a stream of income for life, earn higher investment yield, or reduce your capital gains or estate taxes. Planned gifts often appeal to people who want to benefit a charitable organization but aren't certain how much of their assets they'll need for themselves during their lifetimes.

You can look at the frequently asked questions below and click on the ones of interest to you to go directly to your answer. Please do not hesitate to contact Planned Giving at plannedgiving@gracecathedral.org or 415-869-7812 if you have questions.

Frequently asked questions about planned giving:

Q. Can Grace Cathedral help me get my estate planning done?
A. Yes. Just ask for our free estate planning kit. The Kit includes:

Effective estate planning usually takes time, effort and a good attorney. In the end your plan will allow your family to avoid the delay, dissension and needless expense that often occurs when a loved one dies without a Will. Once you have taken care of your family's needs, please consider a thoughtful bequest to Grace Cathedral.

To order your estate planning kit, contact Planned Giving at plannedgiving@gracecathedral.org or 415-869-7812.

Q. How do I include Grace Cathedral in my will or living trust?
A. The most common way people remember Grace Cathedral in a will or living trust is through a charitable bequest. You do not have to rewrite your current documents. You simply add an amendment, called a codicil, to your will or living trust. Here is some suggested language you can have your attorney review:

"I give devise and bequeath to Grace Cathedral Corporation located in San Francisco, California, the sum of ____________ dollars ($ _________). (Or state a percentage of your estate, or state a percentage of your estate, or describe real or personal property, including exact location.) For the benefit of its general purposes (or specify the Grace Cathedral program you wish to support)."

Your bequest is entirely under your control during life and becomes irrevocable only at death. If you have questions about bequests, contact Planned Giving at plannedgiving@gracecathedral.org or 415-869-7812.

Q. I want to learn more about Grace Cathedral's Legacy Circle.

We invite you to become a Member of the Grace Cathedral Legacy Circle. Designating the Cathedral in your will, or as one of the beneficiaries of a retirement plan or through any other estate planning vehicle, will include you in the Legacy Circle. And as an added bonus, there can be significant tax and income benefits for you and your heirs. All you have to do is let us know in writing that you have done so. As a member of this esteemed circle of supporters, you join others in proclaiming your commitment to the life and mission of Grace Cathedral.

Please contact Planned Giving at plannedgiving@gracecathedral.org or 415-869-7812.

Q. What's the big advantage in making Grace Cathedral a beneficiary of my retirement plan?
A. A designation in your IRA or other retirement plan may be a very cost-effective way of making a gift to Grace Cathedral. If you leave your retirement plan to your children, they will have to pay income tax on either a lump sum distribution or the income stream from the plan. Grace Cathedral does not pay this tax. Here's an example of what this can mean to your heirs:

A widower died a few years ago. He left his $300,000 house to charity and his $300,000 retirement plan to his relatives. He should have done just the opposite. The relatives had to pay income tax on the $300,000 in the retirement plan, an $80,000 cost to them. If they had received the home, and the charity had received the retirement plan payment, no one would have paid income tax. For more information on the advantages of retirement gifts to Grace Cathedral, contact Planned Giving at plannedgiving@gracecathedral.org or 415-869-7812.

Q. What kind of donors should consider a charitable remainder trust?
A. Donors who want income for life, bypass of capital gains tax on stock or real estate, reduced taxes, and the satisfaction of providing for Grace Cathedral. Anything you place in a charitable trust--cash, stock, real estate--is invested by the trustee to pay you income for the rest of your life and, if you wish, pay your heirs for life or for a term of years. After the death of all income beneficiaries, what remains in the trust passes to Grace Cathedral. Your trust may provide you with some important tax benefits:

  1. An immediate income tax deduction for a percentage of your gift.
  2. No tax on the sale of appreciated property.
  3. The trust principal passes to Grace Cathedral free of estate tax.

For a personalized analysis of your tax and income benefits, contact Planned Giving at plannedgiving@gracecathedral.org or 415-869-7812.

Q. How can I give my home and keep it, too?
A. A charitable life estate agreement allows you to give a personal residence or farm to Grace Cathedral while retaining the right to live there for life. Donors who enter a life estate agreement receive an immediate income tax deduction. The deduction is based on the present value of the home discounted by the estimated length of time the charity must wait to receive the home. To put it simply, a person age 70 will receive a larger deduction than will a person age 50, all other things being equal.

The IRS grants the deduction even though the donor continues to enjoy full use of the home. But the IRS also expects the owner to have full responsibility for the care and maintenance of the home. That's why life tenancy agreements simply continue things as they are currently, with the donor dealing with maintenance, property taxes, insurance and the like. The major benefits to the donor, then, are continued use of the home, an immediate charitable income tax deduction, the avoidance of probate, the avoidance of estate tax on the property, and the satisfaction of making a substantial gift to Grace Cathedral during one's lifetime. For further information contact Planned Giving at plannedgiving@gracecathedral.org or 415-869-7812.

Q. Why does Grace Cathedral need planned gifts?
A. Grace Cathedral is moving into its second century of service. Your bequest will be used to preserve, protect and bequeath to future generations the Cathedral's magnificent building and grounds, and to keep Grace Cathedral an inclusive resource to the City of San Francisco and to the world through its ministries of formation, education, social outreach and pastoral care.

Q. What should I do if I have already remembered Grace Cathedral in my estate plan?
A. We would be honored to enroll you in Grace Cathedral's Legacy Circle, so please let us know of your bequest by contacting Planned Giving at plannedgiving@gracecathedral.org or 415-869-7812.

Gifts that pay you -- Charitable Gift Annuities
The oldest and best known of charitable gifts that pay donors income for life is the charitable gift annuity described here. Charitable remainder trusts also pay donors income for life, give them an immediate income tax deduction and relief from capital gains tax. But the charitable gift annuity is also guaranteed by the issuing charity. The payments are fixed and so completely predictable. The charitable gift annuity allows you to make a gift to a good cause while giving you a current income tax deduction and payments for life. In this way, some donors discover they can make a far more generous future gift to Grace Cathedral than they thought possible. This is not to say that charitable gift annuities are superior charitable remainder trusts. Everything depends on what the donor wishes to accomplish.

A gift annuity is simple to create. You fund your annuity with a gift of cash or stock. You are then paid a guaranteed fixed amount monthly, quarterly, semiannually or annually for life. You must be at least 65 when the payments begin and your annuity must be created with gifts having a total value of at least $5,000.

Your gift annuity can provide payments for one or two lives. Both plans generate an immediate charitable tax deduction and partially bypass capital gains tax. In addition, part of your payment will be tax-free and all of your gift will pass to Grace Cathedral free of estate tax.

Grace Cathedral Gift Annuity Program: Grace Cathedral's gift annuity program appeals to those who prefer predictable payments to variable income. A Grace Cathedral gift annuity provides fixed guaranteed payments to donors along with the satisfaction of making a significant future gift to the agency. Annuity rates vary with age. The older you are, the higher your rate. Payments once establish remain the same for life.

Here's an example: Mary Edwards, age 75, establishes a one-life gift annuity contract with $10,000. In exchange for her gift, Grace Cathedral pays her $710 annually for life. $460 of her $710 payment is tax-free for twelve years. She also receives a $4,496 charitable income tax deduction.

For an estimate of your rate and deduction, confidentially provided, contact Planned Giving at plannedgiving@gracecathedral.org or 415-869-7812.

Q. Can I use my life insurance policy to make a planned gift to Grace Cathedral?
A. Yes. Using an existing life insurance policy is a quick and convenient way to make a planned gift commitment to Grace Cathedral. Ask your insurance company for a beneficiary designation form, name "Grace Cathedral located in San Francisco, California" as a beneficiary of a percentage of the ultimate value of the policy or for a fixed amount, and send the beneficiary designation form to the company that holds your policy. Some life insurance company Web sites make this exceedingly easy.

Q. Can you provide me with an estimate of my tax and income benefits?
Yes, we can provide you with estimates of the tax and income benefits you will receive if you take out a charitable gift annuity or create a charitable remainder trust. We need to know the birth dates of those who will receive income from these charitable tools and the kind of gift you have in mind (cash, stock, real estate). These calculations are for educational purposes only and should be reviewed by qualified independent advisers of your choosing. For calculations confidentially provided, contact Planned Giving at plannedgiving@gracecathedral.org or 415-869-7812.

Q. What are "named funds" and why are they like stained glass windows?
A. With your Endowment gift of $100,000 or more, Grace Cathedral will establish, at your request, a named Endowment bearing the name(s) you designate. Naming opportunities offer friends, congregation members, foundations and corporations numerous ways to commemorate family, friends, organizations or other individuals. These gifts can embody the donor's ideals and provide essential support for Grace Cathedral's future.. Individuals and families or other groups may combine gifts made over time to meet the minimum amount. While we prefer that named Endowment gifts be unrestricted, they may be restricted to a mutually agreed upon purpose.

Named funds are endowment funds that carry the name of the donor or the donor's family, or of a loved one chosen by the donor. You've seen the stained glass windows of Grace Cathedral that honor individuals by showing their image. Named funds are something like that, enduring reminders of the donor's devotion to Grace Cathedral and, in some cases, a way for the donor to honor a parent, spouse, or other loved one perpetually. Named funds are listed in Grace Cathedral publications annually. Currently, Grace Cathedral named funds require a minimum gift of $100,000 which can be contributed over five years through a pledge or created at death through a bequest. In either case named funds are created through a letter of understanding signed by the donor and Cathedral staff which specifies the name of the fund and its general or specific purpose.

Please contact Planned Giving at plannedgiving@gracecathedral.org or 415-869-7812 to be referred to our planned giving specialist.

Q. I am interested in learning more about giving to the Diocese of California.

A. Click here to go to www.EpiscopalGift.org

Q. What does that mean? A Glossary of Terms

Bequest: A disposition of property by will, more broadly, any legally binding statement that disposes of property at death.

Benefits to Heirs: Charitable remainder trusts, and other income producing charitable instruments, can provide heirs or friends with income for life or a term of years. The donor can name a child or other individual as a successor income beneficiary when the donor sets up a charitable trust and names the child or friend as a successor income beneficiary. The donor must make sure that the successor income beneficiary is not so young that the charitable trust will be disqualified.

Codicil: An addition to a will that explains, modifies, or revokes a previous will provision or that adds an additional provision. A codicil must be signed and witnessed with the same formalities as those used in the will's preparation.

Capital Gain: The difference between the original price and a higher selling price after something has been held for at least one year. For example, stock purchased for $10 and sold at least one year later for $100 has a capital gain of $90. The gain is subject to capital gains tax.

Charitable Deduction: A deduction from both estate tax and gift taxes for all assets given to charity. Life time gifts can, if properly structured, also qualify for an income tax deduction. Charitable remainder trusts and charitable gift annuities both generate charitable deductions.

Charitable Gift Annuity: A contract between a donor and a charity that obliges the charity to pay an agreed upon payment for life in return for the donor's gift. Whatever remains in the donor's death is then used by the charity to support its work. Along with the income tax deduction, the donor also receives an immediate charitable income tax deduction and partial bypass of capital gain tax. Click for information about Grace Cathedral's gift annuity program.

Community Property: A method of holding title to property of married persons. All income earned after marriage is usually community property. Each spouse owns an undivided one-half interest.

Devisees & Legatees: Those persons who receive part or all of an estate under the Will of a decedent.

Diversification: In finance, spreading investments into may kinds of investments in hopes of reducing investment risk.

Double Step-Up: Property is held as community property (and not joint tenancy) both spouses' halves of the property obtain a new basis, not just the deceased spouse's one half.

Estate Planning: A legal process that allows you to determine how your assets will be managed for your benefit if you are unable to do so, when certain assets will be transferred to others, either during your lifetime, at your death, or sometime after your death, and to whom those assets will pass. Estate planning also addresses your welfare and needs, planning for your own personal and health care if you are no longer able to care for yourself. The basic tools of modern estate planning are wills, living trusts, durable powers of attorney for property management, and advance health care directives. Ask for Grace Cathedral's free Estate Planning Kit to get you started.

Estate Tax: Tax imposed by the IRS on all assets you own at date of death, including life insurance and retirement benefits, plus taxable gifts made during your lifetime.

Gift Tax: Tax imposed on taxable gifts made during life. Gifts to individuals are taxable if they exceed a certain amount, $12,000 in 2007, for example. Gifts to qualified charities are not subject to tax and are also tax-deductible.

Gift Tax Annual Exclusion: The amount of gifts that can be made each year to each person free of gift tax.

Heirs: Generally, those persons who would inherit by Intestate Succession.

Income Tax Benefits: With charitable remainder trusts, donors receive an immediate income tax deduction when they transfer assets to the trust. The deduction is determined by IRS tables. A tax deduction less than 10% of the face value of the trust will disqualify the trust. The key factors in determining the deduction are (1) the ages of the income beneficiaries when a gift is made to the trust and (2) the payout rate of the trust. Care must be taken to make sure the deduction is large enough to satisfy the requirements of the IRS. In general, the older the income beneficiaries, the greater the income tax deduction, and the lower the payout rate the higher the income tax deduction.

Intestate: If you don't have a Will, you are said to die "intestate".

Intestate Succession: Statutory system setting forth which relatives will receive the estate of a person who died without a Will.

Joint Tenancy: A method of holding title to property with another which allows that property to pass automatically to the surviving property owner.

Legacy Circle: The Legacy Circle of Grace Cathedral honors those who have included the agency in their estate plan by listing them, by name or anonymously if they wish, on the Legacy Circle honor roll. Legacy Circle members are invited to special events from time-to-time. If you have already included Grace Cathedral in your estate plan, we would be honored to enroll you in the Legacy Circle. Please contact Corty Fengler at 415/749-6313 or cortyf@gracecathedral.org.

Life Estate: In common law, ownership of land for the duration of a person's life. In a charitable context, the right to use for life property that has been deeded to a charity. Example: Alice Jones, 78, deeds her home to a favorite charity while retaining the right to live in the home for life. Ms. Jones is said to have entered into a Charitable Life Estate Agreement. By irrevocably transferring ownership of her home to charity, Ms. Jones receives a substantial income tax deduction. The deduction is reduced by the value of her life estate, that is, her right to continue to have use of the home. She also must continue to maintain the home in good repair and pay all ordinary expenses, including insurance and property taxes.

Lifetime Income: With charitable trusts, the payments made to the trust's individual income beneficiaries, usually for life. Payments can also be established for a term of years rather than for life.

Living Trust: An entity created by execution of a document entitled Trust Agreement. The person who creates the document is the Trustor. The Trustor transfers most of his or her assets into the trust during his or her lifetime. Living trusts are also referred to as "Revocable Trusts," "Revocable Living Trusts" and "Inter Vivos Trusts." A Living Trust is revocable and amendable by the Trustor, that is, the person who established the trust, during the lifetime of the Trustor, and all assets can be removed by the Trustor at any time. Upon the Trustor's death, the Trust assets pass to the persons named in the Trust, without probate.

Payment Rate: Used with charitable trusts, the stated payment rate to the trust's income beneficiaries. The rate must be at least 5% but not so high a rate that the charitable income deduction generated by the trust would be less than 10% of the trusts value when funded.

Probate: A court proceeding by which a deceased person's property is administered to clear title to the property, pay debts and expenses, and distribute the property to the proper heirs or devisees.

Separate Property: A single person's property is separate property, and property that was owned by a spouse before marriage or that is inherited after marriage is that spouse's separate property.

Stepped-Up Basis: For income tax purposes, assets of a decedent get a new basis equal to fair market value at date of death. This means that, when the property is sold by an heir, there will be little or no capital gains tax because the capital gain is the difference between the basis and the fair market value.

Tax and Income Calculations: Grace Cathedral will provide you and your advisers with estimates of tax and income benefits your may receive by establishing a charitable remainder trust, and other types of charitable vehicles. All information is provided confidentially and without cost or obligation. Call Corty Fengler at 415/749-6313 or at cortyf@gracecathedral.org.

Term of Years: A specified length of time. For example, a charitable remainder trust may last for a term of years, not to exceed 20, rather than for the life expectancy of the income beneficiary.

Testate: If you have a Will, you are said to die "testate".

Trustee: The person who is in charge of administering the Trust (i.e. making investments, distributing the trust income and principal pursuant to the provisions in the Trust Agreement). During the Trustor's lifetime the Trustor is usually the Trustee. If the Trustor becomes incapacitated or dies, then the next person named in the Trust Agreement to be Trustee becomes the Trustee.

Undivided Percentage Interest: A stated percentage of a whole property, rather than a specifically defined part of a whole: "They decided he would own a 50% undivided percentage of the house rather than own the second floor only."

Unified Credit: The amount of your estate that can pass to anyone before an estate of gift tax is payable.

Unlimited Marital Deduction: A deduction from estate tax or gift taxes for all assets passing outright to a spouse or to a qualified trust for a spouse (except for non-US citizens).

Will: A document which directs what happens to your property at your death.

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