Jackson Area Chapter

Gift Planning

Thank you for considering a gift to the American Red Cross, Jackson Area Chapter. As someone interested in our mission to provide relief to victims of disasters and help people prevent, prepare for and respond to emergencies, working with the American Red Cross can lead you to find the most effective way to meld your desire to help with sound financial planning.

While some of the gift techniques outlined here can be completed on your own, the services of legal and financial advisors are recommended to ensure that you make fully informed decisions. Also, the Jackson Area Chapter has a gift planning officer available to work with you and your advisors.

• What is "gift planning" and how do I make a "planned" gift?
• Bequests
• Life Income Gifts
• Charitable Remainder Annuity Trust
• Pooled Income Fund

A planned gift is one that is made after due consideration is given to the present and future financial need of the donor's present and future family responsibilities, along with the donor's personal desire to support the work of the American Red Cross in a meaningful way with full consideration given to the tax implications of the gift.

Many people find that donating stocks, bonds or shares in mutual funds can lead to a gift much larger than they thought they could give. A gift of securities should be discussed with your financial advisor and a member of the American Red Cross planned giving staff.

In general, if the securities are held in "street name" they may be transferred to the American Red Cross, Jackson Area Chapter, DTC formatted.

If you have a will, then you understand the need for sound financial planning. But did you know that including the American Red Cross, Jackson Area Chapter in your will can be a lasting -- and financially astute -- way to make a gift.

The will (or bequest) is the most basic type of planned gift. It is a revocable gift, and since it doesn't have an immediate cost to you, the donor, other than for the preparation of the will, it appeals to donors of all financial levels.

• A Specific Bequest is a gift of something designated by the donor, such as an amount of money, a security or a piece of real estate. A specific bequest can also be a percentage of an estate rather than a specific dollar amount. 
• A Residual Bequest is a gift made from what is left in an estate after all other bequests have been made. 
• A Contingent Bequest takes effect only when other bequests cannot be fulfilled for some reason.

"I give and bequeath to the American Red Cross Jackson Area Chapter, the sum of $______ (or ___ percentage of the rest, residue and remainder of my estate) to be used for the general purposes of the organization."

• Charitable Gift Annuity:
  A charitable gift annuity is a simple contract between you and the American Red Cross. In exchange for your irrevocable gift of cash, securities, or other assets, the American Red Cross agrees to pay one or two annuitants you name a fixed sum each year for life. The older your designated annuitants are at the time of the gift, the greater the fixed income the American Red Cross can agree to pay. In most cases, part of each payment is tax-free.

As a unitrust donor, you irrevocably transfer assets, usually cash, securities or real estate, to a trustee of your choice (For example, a bank trust department). During the unitrust's term, the trustee invests the unitrust's assets. Each year, the trustee pays a fixed percentage of the unitrust's value, as revalued annually, to one or more beneficiaries named by you. Payments must be at least five percent of the trust's value and are made out of trust income or trust principal if income is not adequate.

Our Gift Planning Officer can give you a current illustration suited to your needs, since there are several types of unitrusts each of which is best suited to different types of gift assets.

• Charitable Remainder Annuity Trust
  A charitable remainder annuity trust (an "annuity trust") is another type of gift plan defined by federal tax law that allows you to provide income to yourself or others for life or a term of years while making a generous gift to the American Red Cross.

As an annuity donor, you would irrevocably transfer assets, usually cash, or securities, to a trustee of your choice (such as a bank trust department). During the trust's term, the trustee invests the trust's assets. Each year, the trustee pays a fixed dollar amount, to one or more beneficiaries named by you. Payments must be at least five percent of the trust's value and are made out of trust income, or trust principal if income is not adequate.

• Pooled Income Fund
  The American Red Cross Pooled Income Fund is a gift plan defined by federal tax law that allows you to provide income to yourself or others for life while making a generous gift to the American Red Cross.

When you make a donation to the American Red Cross Pooled Income Fund, your irrevocable gift of cash or securities is invested together with the gifts of other donors. Your proportional share of the fund's income is distributed quarterly for life to one or more beneficiaries named by you. The amount of the payout varies based on the fund's earnings. When the last income beneficiary of your gift dies, the principal attributed to your gift is removed from the fund and given to the American Red Cross.

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