Giving: Planned Giving
Bequests: Bequests (specific, residuary, and contingent gifts made by will) are the most popular type of planned gift. Whether you wish to provide general operating income for us to use as needed, which provides us with flexible support, or to a specific program, a bequest is a way to ensure that we and our programs continue to operate through your generosity. A bequest may also help you meet your financial and estate-planning goals since an estate-tax charitable deduction for the entire amount of the gift is allowed. While your will (or codicil) should be prepared by your attorney in consultation with your advisors, we are available to discuss all opportunities with you.
Charitable Remainder Trusts: Charitable remainder trusts allow you to provide us with a gift and retain a benefit from the assets you give at the same time. These separately managed trusts can be tailored to meet your financial goals with respect to the payout rate, type of income stream (variable or fixed), and payment schedule. To establish a remainder trust, you make an irrevocable contribution of cash, securities, or other property, which is placed in trust. The trust pays an income stream to one or more named beneficiaries (which can include you) for life and/or for a set term of years (not to exceed 20), and the museum receives the right to principal as a remainder interest. The two most common types of charitable remainder trust are: (1) the annuity trust, which pays a fixed dollar amount each year based on a percentage (at least 5%) of the initial fair market value of the trust assets; and (2) the unitrust, which pays a variable income stream based on a percentage (again, at least 5%) of the fair market value of trust assets as revalued each year. A deferral feature is available for charitable remainder unitrusts. Because charitable remainder trusts (like an IRA or 401(k)) are tax-exempt, this deferral feature can make them a useful retirement planning tool if you are in a position to defer your receipt of an income stream. Charitable remainder trusts are typically funded with assets worth $100,000 or more. Establishing such a trust generally entitles you to claim an immediate income-tax charitable deduction. You should consult with your financial, tax, and legal advisors for more information on charitable remainder trusts as they pertain to your particular situation and needs.
For more information about charitable remainder trusts, please contact Kristyn Ribera, Stewardship Manager in our Office of Institutional Advancement.
Charitable Lead Trusts: A charitable lead trust is the reverse of a charitable remainder trust. Charitable lead trusts enable you to provide us with an income stream, immediately, for a set term of years or for a term measured by one or more lifetimes- after which the trust assets pass to you or your estate or to your heirs. Leaving the asset to heirs can significantly reduce the gift or estate tax that would otherwise apply. If you think a charitable lead trust could be a useful way to structure a gift, review the alternatives for structuring the trust with your financial, tax, and legal advisors.
For more information about charitable lead trusts, please contact Kristyn Ribera, Stewardship Manager in our Office of Institutional Advancement.
Retirement Plan Assets: Assets in qualified (tax-deferred) retirement plans may represent a large portion of your total assets and therefore may be an important factor in planning testamentary charitable gifts. Retirement assets generally considered suitable for charitable gifts include such plans as IRAs, Keoghs, SEPs, 401(k)s, 403(b)s, and ESOPs.
Left to family members or friends, these assets are subject to income tax and may also be subject to estate tax and generation skipping transfer tax. Because of this potential double layer of tax, retirement plan assets may be particularly attractive as an asset to leave as a gift. In other words, if you designate us as a beneficiary upon your death of all or a specified percentage of a retirement plan, the portion of the plan payable to us will generally escape estate taxes, and we, as a tax-exempt institution, will not be required to pay income tax on the distributions. As a general rule, if you intend to make both noncharitable and charitable gifts at death, it makes sense to consider using your tax-deferred retirement plan assets for charity and other assets for heirs. If you are thinking about donating retirement plan assets, you should discuss the matter with your advisors beforehand.
For more information about retirement gifts, please contact Kristyn Ribera, Stewardship Manager in our Office of Institutional Advancement.
Life Insurance Policies: Naming us as the beneficiary of an existing life insurance policy that is no longer needed to provide for dependents is a simple way to support us. Since you are the policy owner, the value of the policy will be included in your estate, but an offsetting estate-tax charitable deduction will generally be allowed. You may also be able to assign an existing whole life policy to us, irrevocably making the Wadsworth Atheneum the owner and beneficiary, and claim an income-tax charitable deduction for the lesser of either your basis in the policy or its fair market value in that year. If the policy is not paid up and additional premium payments are due, you may donate cash or the equivalent to us to pay the premiums each year and claim a full tax deduction for the gift. Lastly, you may be able to purchase a new policy naming us as owner and beneficiary, pay the annual premiums, and claim the premium amount as a charitable contribution.
For more information about life insurance gifts, please contact Kristyn Ribera, Stewardship Manager in our Office of Institutional Advancement.
Tangible Personal Property: Tangible personal property, such as books, artwork, jewelry, antiques, and the like, may be donated to us during your lifetime or by bequest. We must give special consideration to such gifts before we are able to accept them, and we advise you to contact us if you are thinking of donating tangible personal property to the Museum.
As with gifts of appreciated securities held long term (longer than 12 months), a donor of tangible personal property held long term and accepted by the Wadsworth Atheneum is potentially entitled to claim an immediate income-tax charitable deduction and avoid capital gains taxes. The extent of the allowable income-tax deduction for such a gift, however, would depend on whether we use the property in a manner related to its tax-exempt mission.
If the use of the contributed property is related to our exempt purposes (e.g., gifts of artwork accepted into our collection), the donor is generally entitled to claim an income-tax charitable deduction for the full fair market value of the property (up to 30% of AGI with a five-year carryover). If the use of the contributed property is unrelated to our exempt purposes, or if the donor held the property for 12 months or less before making the donation, then the donor’s income-tax charitable deduction is limited to the cost basis in the property.
For more information about tangible personal property, please contact Kristyn Ribera, Stewardship Manager in our Office of Institutional Advancement.