Planned Giving Opportunities
Learn about the various ways to create your legacy.
Many people remember their favorite charitable organizations in a bequest. This simple gift made through a will reduces the taxable estate and provides security for the donor to use assets as needed during their lifetime, while creating the revocable promise of a memorable gift depending on what is left of the estate.
Charitable Gift Annuity
Cincinnati Opera is excited about a new planned giving opportunity that has been developed in conjunction with the Fine Arts Fund and Fifth Third Bank.
A Charitable Gift Annuity (CGA) is an irrevocable gift of assets, sanctioned by the Internal Revenue Service. It offers several tax advantages and the opportunity for increased income in exchange for the gift of assets. Convert a gift of $10,000 or more in appreciated stock, cash or a certificate of deposit into a CGA, and receive a fixed rate of income for life. The gift then reverts to Cincinnati Opera. In addition to providing permanent support to Cincinnati Opera, a CGA offers four important tax benefits:
- Receive a charitable income tax deduction, based on the full market value of the assets contributed, minus the present value of the life-income interest retained. In most cases, the deduction is about 50% of the gift value.
- If the CGA is funded with appreciated securities, no immediate capital gains tax is payable. Only a portion of the capital gains is payable, and the tax is spread over the lifetime annuity payments.
- Part of each annuity payment will be considered a tax-free return of the principal. This increases the cash flow from the gift, an advantage over other types of life-income gifts. (If they live beyond their life expectancy, the full annuity payment will be taxed as ordinary income.)
- No estate tax is charged to the donor or Cincinnati Opera on the assets they give because the gift is completed during their lifetime.
The paperwork is easy: a simple contract between the donor and the Fine Arts Fund is signed after they consult their attorney or tax advisor. The FAF invests the contribution and makes the annual annuity payments. Through good investment management a significant sum in their name is reverted to Cincinnati Opera.
Charitable Remainder Trust
A charitable remainder trust (CRT) is a flexible, tax-advantaged way to create an irrevocable, deferred contribution to Cincinnati Opera. The donor places the assets (securities, cash, real estate, etc.) into a trust, which then provides income payments to the named beneficiaries during their lifetimes. Cincinnati Opera receives the remaining assets upon the end of the trust term.
A CRT is a highly structured plan that requires careful compliance with tax laws. Cincinnati Opera has several attorneys on the Planned Giving Advisory Committee who are available to assist if considering this option.
Charitable Lead Trust
A charitable lead trust (CLT) commonly is considered a reverse charitable remainder trust. A CLT provides a stream of income to Cincinnati Opera for a specified number of years, and the donor or heirs receive the residual principal after the termination date. This type of charitable giving easily lends itself to benefiting programs that have a specific mission. Use a charitable lead trust to assist one of these programs, or to start a new project or program.
Additional Planned Giving Opportunities
If electing to create another form of planned gift (donating an insurance policy or real estate) that is arranged without involving the Cincinnati Opera staff, please let us know (amount need not be disclosed). The donor will then be included in our Society of Angels, and receive recognition and special benefits for their generosity and vision.