You can leave a substantial legacy for historic preservation and education in the Syracuse / Central New York community.
The George & Rebecca Barnes Foundation remains committed to preserving the historic Barnes Hiscock Mansion at 930 James Street and providing quality educational programs and tours to school children, the Central New York Community and visiting tourists. Membership dues accounts for less than 10% of our total income each year. Donated income – from individual gifts to corporate sponsorships to special events – accounts for 60% of our income.
Your decision to support the Barnes Foundation with your gift of cash or appreciated securities expresses your belief in the importance of how we preserve the history of Syracuse and educate the community each year.
The Foundation is a 501(c)(3) charitable organization and any gifts are income and estate tax-deductible. If you have assets that would cause you to be taxed (over $1 million in NYS or over $5 million Federally) you would find that making a lifetime gift actually saves more than making one at death although both are excellent planning tools.
Additionally, you can join others in the community who have helped strengthen the foundation’s future by including the Barnes Foundation in your estate plans. The easiest way to make a planned gift to the George & Rebecca Barnes Foundation is through your will, with a specific dollar amount or a percentage of your estate.
Here is an overview of just some of the ways you might consider supporting to the Foundation. Keep in mind that any planned gift whether made during lifetime or at your death may be directed to a fund named in the manner you wish or used for a special need of the Foundation. For example, you could establish a Foundation fund in your family name for the purchase of additional property, either land or furniture and articles original to the program; to support a school program of annual class tours or the specific restoration of a room or feature at the mansion. Foundation board members or volunteers would be happy to discuss your ideas and work with you and your advisors to make the appropriate arrangements.
Gifts made by Will
A gift to the Foundation made through your will is a way for your family and friends to acknowledge and honor your commitment to the Foundation and its financial future. Such a gift may also have tax benefits by providing a deduction to your estate. There are a number of bequest arrangements to consider.
General Bequests: Perhaps the most common testamentary gift is the gift of cash called a general bequest which can be satisfied from the general assets of your estate. Such a gift is made by adding a provision in your will that directs payment of a dollar amount, e.g., I give and bequeath the sum of $10,000 to the George and Rebecca Barnes Foundation. As this example shows, drafting a general bequest in your will is usually quite straightforward.
Specific Bequests: Securities, real estate and personal property may also be donated under the provisions of your will. If you are considering this type of gift, it would be helpful to discuss your ideas with the Foundation or other named charity to understand how that property will be handled when received. In most instances, the asset donated will be sold by the charity to raise cash which is then invested for the financial future of the organization.
Contingent Bequests: Most well-drafted wills include an alternate beneficiary such as a charity in the event your primary heirs do not survive you. This is called a contingent bequest. Such a clause in your will would direct the balance of your estate to the George & Rebecca Barnes Foundation or other charities should your named heirs predecease you. The contingent bequest is paid out of your residuary estate, net of expenses, debts and general and specific bequests.
It is important to make sure your entire estate plan, documents, beneficiaries, trusts, IRAs, etc are coordinated. Many make the mistake of assuming their will governs where their assets will go when the truth is the will only governs probate assets. If you would like to attend a class on this topic please let us know.
Trust Income Agreements
Trust Income Agreements involve a number of arrangements including the Charitable Remainder Trust and the Charitable Lead Trust. There are typically significant income and estate tax advantages as well as capital gain tax savings. Whether made during lifetime or funded upon your death, these trust agreements require the assistance of experienced advisors.
Charitable Remainder Trust: The Charitable Remainder Trust benefits you and/or your beneficiaries with income for life or for a period of years and then directs the remainder to the Barnes Foundation when the trust terminates. Generally, the trust established while you are living creates a large current tax deduction and often a larger income than was available before the asset was transferred and re-diversified. Appreciated stock is a popular gift for this as well as high appreciated and depreciated real estate. Remainder trusts are commonly used in two forms: the Unitrust where the income paid out varies from year-to-year depending upon the changing value of the trust assets, and the Annuity Trust where the annual payment is a fixed dollar amount and the payments often are partially tax free. It is difficult to find interest rates that can compete with a well thought out CGA. In the optimum circumstances, a donor will receive more income from the trust than what the gifted asset is currently producing. For example, a low-yielding stock once contributed to the trust will be sold and reinvested to generate substantially greater yield. Such arrangements are real win-win situations for the donor and the Barnes Foundation.
Charitable Lead Trusts: Another way to benefit your family and the Barnes Foundation is with the Charitable Lead Trust. Here you loan an asset to a trust for the benefit of the Barnes Foundation for a set term of years. The Foundation then uses the “lead income” for that designated period of years following which the assets are returned to you or transferred to your heirs with favorable tax consequences. The affluent are looking for tax advantaged ways to move more assets to their heirs. The $5 million dollar gifting that may disappear after 2012 should be seriously considered by those with more than they need. In fact, a how much do you need analysis can help the benefactor disinherit the IRA, get more money to their family, and help the Barnes Foundation all at the same time. The Lead Trust allows you to contribute to charity for a significant period of time during which the trust will have grown tax free. Now at the end of the trust term, your heirs may receive much more than they would have otherwise.
Gifts of IRA and Retirement Funds
Gifts of IRAs and retirement funds to the Barnes Foundation can have significant added tax benefits. The proceeds of such accounts are normally taxable to the owner or the designated beneficiary. However, if you designate the Foundation as your beneficiary at your death there is no income tax required when the funds are received by the Foundation because of its tax-exempt status. In most situations, such arrangements can be made simply by making the proper designations on the beneficiary designation forms of your IRA and retirement account holdings. Some do not need the RMD and can use that to fund a larger legacy.
There are also new opportunities under tax laws enacted in 2006. If you are over 70 1/2 years old, you may direct your required IRA distributions to the Barnes Foundation without having to pay income tax. If you are considering this technique you should consult with your advisors to be certain that you qualify. The directed distributions are most attractive to the taxpayer who does not itemize deductions.
As children grow up and your financial risks change, your life insurance policy may no longer be needed. Whether your insurance is paid up or you are still making annual payments, you might consider designating the Barnes Foundation as the beneficiary of the proceeds at your death. Alternatively, it is sometimes appropriate to make the charity the policy owner. In any case, there could be tax benefits. Should you be considering a gift involving life insurance, it is wise to discuss the arrangement with the charity and your professional team of advisors.
The information set forth herein is provided as an educational service. Professional advisors should always be consulted in the planning process.
If you are interested in helping the George and Rebecca Barnes Foundations in any of the ways described above, please contact us at (315) 422-2445 or email [email protected].