HAVE YOU WRITTEN YOUR WILL?

HAVE YOU REMEMBERED ST ANN'S IN YOUR WILL?

"The minister of the congregation is directed to instruct the people, from time to time, about the duty of Christian parents to make prudent provision for the well-being of their families, and of all persons to make wills, while they are in health, arranging for the disposal of their temporal goods, not neglecting, if they are able, to leave bequests for religious and charitable uses."

(Page 445 of the Book of Common Prayer)

Churches need bequests.  St Ann's Church needs bequests.  Our financial needs are constantly increasing.  No clergy, Vestry member or well-informed parishioner will argue with that.

No-one can make a bequest without writing a will, and most people don't have wills. Did you know that more than 50% of the population ignore pleas to "write your will." And more than 50% of the adult population with college degrees do not have wills.

The gift potential is tremendous.  It has been reported that every week about $100 million is left by people without wills.  If more people wrote their wills and were aware that the church welcomed bequests, churches would receive a share of this important resource.

"We brought nothing into this world

....we can take nothing out of it."

(1 Timothy 6:7)

We know that you love St Ann's Church and want to ensure its ministry for generations to come. Your generosity will help the church meet its current obligations and reach farther in the future.

WHAT CAN YOU GIVE TO ST. ANN'S CHURCH?

Giving to St. Ann's

You can make gifts to St. Ann's in two ways.  You can make a gift directly ("outright gifts") or you can make a gift that will take place in the future or over time ("deferred gifts").  Which type of gift is right for you depends on your personal circumstances and estate planning goals.

A.        Outright Gifts

A gift made directly to St. Ann's takes effect immediately.  Many different kinds of property can be given directly to St. Ann's:

            ·    Gifts of Cash

                   A gift of cash by writing a check is the simplest gift to make.  A gift of cash is also the simplest to receive, and St. Ann's can put the gift to use immediately in support of its ministries.

                   If you give cash to St. Ann's, you are entitled to the most favorable income tax deduction available under the Federal tax laws for charitable gifts.  You may deduct the full amount of the gift, as long as all your charitable gifts for the year do not exceed 50% of your income.  If your charitable gifts do exceed that limitation, the excess may be deducted during any of the next 5 years.

            ·    Gifts of Securities

                   You can also make a gift to St. Ann's of stocks, bonds, mutual funds and other securities.  A gift of securities can be as simple as cash to make and to receive.  And if the securities have been held for more than 1 year and are appreciated, a gift of securities may have additional tax advantages to you.

                   Like gifts of cash, you can deduct the full fair market value of a gift of securities (not subject to any restrictions) as long as all your charitable gifts for the year do not exceed 30% of your income.  If your charitable gifts do exceed that limitation, the excess may be deducted during any of the next 5 years.

                   In addition, there will be no tax due upon a sale of the securities by St. Ann's.  Thus a gift of appreciated securities has the added benefit of preserving the full value of the securities for St. Ann's use, undiminished by tax.

            ·    Matching Gifts

                   Many businesses will make contributions to charity to match gifts of cash or securities by their employees or retirees.  However, most businesses restrict matching gifts to churches and other religious organizations.  You might check with your current/former employer for their rules for matching gifts.  If your gift is eligible, you can enhance the value of your gift to St. Ann's by applying for a match.

            ·    Gifts of Real Estate

                   A generous gift of real estate several years ago has helped secure the future ministries of St. Ann's.  If you own a piece of real estate that has appreciated, you can make a gift of the real estate (or a part of it) to St. Ann's.

                   Like gifts of securities, you can deduct the full fair market value of a gift of real estate as long as all your charitable gifts for the year do not exceed 30% of your income.  Again any excess may be deducted during any of the next 5 years.  And like gifts of appreciated securities, there will be no tax due upon a sale of the real estate by St. Ann's, preserving the full value of the property for St. Ann's use, undiminished by tax.

                   Examples of real estate holdings that might be given to St. Ann's are:  undeveloped land; single-family residences and vacation houses; non-residential real estate such as apartment buildings or office buildings; real estate limited partnership interests; and mineral leases or timber rights.

            ·    Gifts of Personal Property

                   Most gifts of personal property to St. Ann's will provide little or no tax benefit to the donor.  Under a special tax rule, you can deduct only your original investment in the personal property given to St. Ann's.  There are a few exceptions.  For example, you can deduct the full fair market value of the gift if it (and its use) is related to St. Ann's charitable purposes.  You can also deduct the full fair market value of the gift if it is artwork that you created.

            ·    Gifts of Life Insurance

                   If you own a life insurance policy that is no longer needed for the protection of your family or other purposes, you may use it to make a gift to St. Ann's.

                   The simplest way to give a life insurance policy to St. Ann's is to name St. Ann's as the owner and beneficiary of the policy.  You can deduct the cash value of the policy as long as all your charitable gifts for the year do not exceed 50% of your income, deducting any excess during the next 5 years. The total life insurance payout, otherwise subject to US estate tax (maximum rate of 48%), will be preserved for St. Ann's use, undiminished by tax.

There are a number of ways that you can make outright gifts of property to St. Ann's.  You can simply transfer the asset to St. Ann's, described above.  You can "sell" the asset to St. Ann's at a bargain price.  This might be useful for difficult-to-divide assets, especially if it has not appreciated in value.  You could also buy an annuity from the Episcopal Church naming St. Ann's as the beneficiary of the proceeds.  Or you can give St. Ann's a "remainder interest" in a personal residence.  You (and/or your spouse) would retain the right to use the residence during your life and, upon your death, the property is transferred to St. Ann's.  All outright gifts to St. Ann's can be made subject to certain conditions and limitations or may form an endowment to be used only for certain purposes.

B.         Deferred Gifts

A deferred gift to St. Ann's is put in motion today but you defer St. Ann's enjoyment of the gift. There are two types of deferred gifts.  Revocable deferred gifts are those made today but over which you retain the power to change your mind.  Irrevocable deferred gifts are those where St. Ann's gift is final but its enjoyment of the gift is temporarily deferred.  Often you will retain some rights in an irrevocable deferred gift.

Irrevocable deferred gifts are relatively complicated due to the requirements of the Internal Revenue Code.  But the complexity should not discourage you from making them.  Often they can provide substantial benefits to you and your family while also benefiting St. Ann's.  We will defer discussion of irrevocable deferred gifts for another day.  Instead we will focus on how to make revocable deferred gifts to St. Ann's.

            ·    Bequests

                   You may wish to make a substantial gift to St. Ann's but feel that you are not in a position to do so during your lifetime.  If this is the case, you can make a bequest to St. Ann's under your will.  The property described above as appropriate for outright gifts to St. Ann's may also be appropriate for a bequest.

                   You may make a bequest to St. Ann's in several different ways.

                        1.   A specific bequest is a gift of a stated amount of cash or specific assets:

                              I give and bequeath the sum of $__________ to St. Ann's Episcopal Church, Bridgehampton, Long Island, New York, for its general purposes.

                              I give and devise to St. Ann's Episcopal Church, Bridgehampton, Long Island, New York, for its general purposes all right, title and interest owned by me at the time of my death in the land and buildings situated at ______________________.

                        2.   A residuary bequest is a gift of all or part of the property remaining in your estate after taking care of your family and paying all debts, taxes and expenses of your estate:

                              I give, devise and bequeath to St. Ann's Episcopal Church, Bridgehampton, Long Island, New York, for its general purposes all the rest, residue and remainder of my estate.

                        3.   A contingent bequest is a gift that takes effect only if a named beneficiary fails to survive you.  This insures that your gift will be used to further St. Ann's ministries instead of passing to distant relatives or the state under the laws of intestacy.

                              If neither my husband nor any descendant of mine survives me, the I give, devise and bequeath all the rest, residue and remainder of my estate to St. Ann's Episcopal Church, Bridgehampton, Long Island, New York, for its general purposes.

                        4.   A split interest bequest is a gift shared by St. Ann's and family members.  It will take the same form as the irrevocable deferred gifts described above.

                   Your estate may deduct the full fair market value of a bequest to St. Ann's against Federal estate tax without limitation.  This savings in estate taxes will have the effect of reducing the cost of your gift to St. Ann's.  If upon your death you would otherwise owe $50,000 in estate tax, you could make a bequest to St. Ann's without reducing the assets that will pass to your family.  Instead it would reduce the amount passing to the government in tax.

            ·    Qualified Retirement Benefits

                   Pension plans, profit sharing plans, stock bonus plans, 401(k)s, Keogh plans, HR 10 plans and IRAs are sometimes generically called qualified retirement benefits.  These plans are tax exempt so long as the assets remain in the plan.  They require distributions after a certain date and in a certain amount.  These distributions are subject to income tax.  Any distributions above the stated amount are subject to a penalty tax.  At death, any excess balance in the plan will be subject to income tax and, unless it passes to a spouse, could also be subject to penalty tax and estate tax.  The combined tax on the excess balance can approach 90%.

                   Qualified retirement benefits therefore may be the ideal deferred gift to St. Ann's.  You could name St. Ann's as the beneficiary of the plan upon your death.  You can retain the right to change the designation of St. Ann's at any time.  You will not be entitled to a current income tax deduction.  But your estate will be entitled to an estate and income tax deduction to offset the value of the plan.  As a result the excess balance in the plan can be used to support St. Ann's ministries undiminished by tax.

            ·    Life Insurance

                   If you own life insurance that you no longer need for the protection of your family or other purposes, you may use it to make a deferred gift to St. Ann's.  You can name St. Ann's as the beneficiary of the policy.  Like qualified retirement benefits, you will not be entitled to a current income tax deduction. Upon your death, however, the insurance proceeds will be paid to St. Ann's undiminished by tax.

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Your gift to St. Ann's is extremely important.  You should therefore be sure to understand all its implications.  These materials are provided for information purposes only and in no way constitute legal or tax advice.  We encourage you to consult with an attorney or tax advisor before making your gift to St. Ann's.  For further information, please contact the Church Office at  631.537.1527.