Easy Steps to a Meaningful Gift: Beneficiary Designations

You can make a gift to the MREA without a large commitment in your will or estate. Beneficiary designations can be customizable to your own preferences and asset allocation.

There are a few easy steps to naming the MREA as a beneficiary to your assets. Start by requesting a change-of-beneficiary form from your policy administrator or download the form from your provider’s website. Make your desired changes and return the form to establish your gift.

You can be sure the legacy you’ve worked hard to build goes toward causes you care about instead of letting the political machine in Washington decide it for you. If you have a taxable state worth over $22.8 million for a married couple, you can support the MREA to navigate around the federal estate tax, while making a difference in shaping the renewable energy landscape for the future and contributions are fully tax deductible.

Relevant Assets:

• IRAs and retirement plans
• Donor advised funds
• Life insurance policies
• Commercial annuities
• Payable on death (POD) bank account or certificate of deposit

Giving/Income Balance: Charitable Gift Annuity

You can balance your charitable giving with your income in your retirement by taking advantage of charitable gift annuities. By agreeing to make a gift to the MREA, we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life. The balance is donated toward our mission. This option affords you regular payments for the rest of your life, along with federal income tax benefits and support for our mission.

Understanding the process: This option can vary widely depending on your preferences and financial position at the time of your donation. If you are at least 65, we recommend a minimum gift of $10,000.

Relevant Assets:

• Cash
• Appreciated Securities
• Real Estate
• Tangible Personal Property
• Closely Held Stock

Security for your Assets: Charitable Lead Trust

You can use your assets to care for your family and support causes you care about. By combining cash and other assets into a charitable lead trust, you can make regular donations to the MREA over a period of time and after the term the balance is transferred to a beneficiary you select.

You have two options for charitable lead trusts to make payments to the MREA:

A charitable lead annuity trust pays a fixed amount each year to the MREA and is more attractive when interest rates are low and the growth of the assets are smaller.

A charitable lead unitrust pays a variable amount each year to the MREA based on the value of the assets in the trust. With a unitrust, if the trust’s assets go up in value, for example, the payments to the MREA go up as well.

Reliability for Large Estates: Charitable Remainder Trust

If you value reliability and consistency and you have a sizable estate, a charitable remainder trust may be a good option for you to take advantage of tax benefits a receive regular payments. Over a period of 20 years or less, you will be paid regular payments every year in one of two ways. At the end of the trust term, the balance in the trust goes to the MREA.

The annuity trust pays you, each year, the same dollar amount you choose at the start. Your payments stay the same, regardless of fluctuations in trust investments.

The unitrust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. The amount of your payments is recalculated annually. If the value of the trust increases, so do your payments. If the value decreases, however, so will your payments.

Relevant Assets:

• Cash
• Appreciated Securities
• Real Estate
• Tangible Personal Property
• Closely Held Stock
• Retirement Plan Assets

Simple but Effective: Donor Advised Funds

If you would prefer to organize your legacy giving into a grant or series of grants to make to the MREA or other worthwhile causes, a donor advised fund or charitable saving account may be your best option to maintain flexibility and ability to customize.

Relevant Assets:

• Cash
• Appreciated Securities
• Real Estate
• Tangible Personal Property
• Retirement Plan Assets

Retirement with purpose: Beneficiary Designations from Your IRA

If you would like to give from your IRA directly, before or after your passing, wholly or as a percentage, all you need to do is name the MREA as a beneficiary. Just contact your IRA administrator or download from your provider’s website a change-of-beneficiary form.

The annuity trust pays you, each year, the same dollar amount you choose at the start. Your payments stay the same, regardless of fluctuations in trust investments.

Putting your retirement funds to work today: IRA Withdrawal

If you’re at least 59½ years old, you can take a distribution and then make a gift from your IRA without penalty. This is also the case under the CARES Act currently for anyone hoping to withdraw from their IRA or 401(k) for any purpose. If you itemize your deductions, you can take a charitable deduction for the amount of your gift in either case.

If you are 70½ years or older, you can take advantage of Qualified Charitable Distributions (QCD), which allow you to give up to $100,000 per year, income tax free, from your IRA. This method is also called the IRA charitable rollover. This gift has an immediate impact on our work, allows you to avoid the income tax on your gift, and allows you to decrease your income level, which can in turn lower your medicare premiums and taxes on your Social Security distributions.

A Gift Built to Last: Endowments

Endowments provide both short and long term support to our organization. Endowment donations are invested. A portion of the annual income from the investment is used to support the MREA’s mission year after year. The remaining funds are reinvested to ensure indefinite support.

Online Resource: The MREA has an endowment fund through the Community Foundation of Central Wisconsin. Click HERE to easily donate to the fund.

Relevant Assets:

• Cash
• Appreciated Securities
• Real Estate
• Tangible Personal Property

For the More Experienced Investor: Appreciated Securities Gift

Securities and mutual funds that have increased in value and been held for more than one year have their own set of benefits and considerations that should be addressed in your decision to make a gift to the MREA. There are several notable benefits to your portfolio you can take advantage of when you use this method to make a gift of securities or mutual funds to the MREA.

The benefit of this method of legacy giving is that you can reduce or even eliminate federal capital gains taxes on the transfer. You may also be able to take advantage of a federal income tax charitable deduction based on the value of the securities at the time of the transfer. Some securities gifts to consider are:

• A gift in your will or living trust: This is a great option for those who desire the flexibility to make changes to your plan. You will continue to receive dividends from the asset while you maintain ownership and the securities are still yours if you need them for other expenses during your lifetime.
• A transfer on death (TOD) account: Simply put, TOD accounts allow for payment to persons or charities following your lifetime when put in place on an investment or brokerage account.
• A life income gift: Gift annuities and charitable remainder trusts are appreciated securities that provide you a steady income during your life while also contributing toward the future of renewable energy with the MREA.
• An outright gift: You can donate securities to the MREA any time. This works the same as donating using cash or checks in that you receive the same income tax savings, but you will also receive the added benefit of avoiding the capital gains taxes on the transfer, which can be as high as 20%.

*State laws govern transfer on death accounts. Please consult with your bank representative or investment advisor if you are considering this gift.

Contribute toward your gift over time: Gift of Life Insurance

Life insurance can be a valuable tool to take care of your family in the case of your unexpected passing. If you are past such a phase of financial insecurity, life insurance can be used to support causes you care about. You can help build renewable energy with the MREA by:

Name the MREA as a beneficiary of the policy. Gifting life insurance benefits is as simple as updating your beneficiary designation form with the policy holder. The MREA can be made the primary beneficiary or gifted a percentage of a given amount. You can also make us the contingent beneficiary so that we will receive the balance of your policy only if your primary beneficiary doesn’t survive you.

Make an outright gift. You can make an outright gift to the MREA of a new or existing life insurance policy. When you do, premium payments on your policy become tax deductible for those who itemize on their income taxes.

Skip the hassle of the sale: Gift of Real Estate

You can gift the MREA a portion of your legacy in more forms than the strictly monetary. Real estate, such as a personal residence, vacation home, farm, or commercial property all provide us with opportunities to continue and even upgrade the pursuit of our mission. You also may reduce or even eliminate the capital gains tax on a property when you gift to the MREA if you have owned the property for more than a year, along with lifting the burdens of maintenance, property taxes and insurance. Properties can be deeded directly to the MREA with some light paperwork completed with your attorney and help from the MREA if needed.

How to use:

• Will or living trust
• Charitable remainder unitrust
• Outright gift

Find a new life for your old possessions: Outright Gift or Bargain Sale

There can be a better option than burdening your family with divvying up your possessions after your passing. Tax benefits will be passed along to your remaining family depending on how effectively the property can be directed toward the MREA’s mission. For more information on how this may apply to your own personal situation and possessions, feel free to contact the MREA directly.

If the federal income tax charitable deduction claimed for a gift of tangible personal property exceeds $5,000, you must obtain an appraisal from a qualified appraiser and submit a special IRS form with the tax return on which the deduction is claimed.

How to Use:

• An outright gift: Contribute to our mission today by donating your car, boat, or solar PV equipment and receive a federal income tax charitable deduction if you itemize.
• Will or living trust: You can become an advocate for the MREA by donating property to our organization through your will or living trust.
• Bargain sale: By receiving approval from MREA leadership on the piece of property beforehand, you may be able to sell us your property for less than the fair market value. For example, if you sell us an antique for $10,000 that is worth $30,000, you will receive a federal income tax charitable deduction of $20,000 plus the payment from the MREA of $10,000.
• Charitable gift annuity: You can sometimes use non-income producing property such as valuable stamp and coin collections or works of art in exchange for life payments and a federal income tax charitable deduction. The amount of the charitable deduction depends, in part, on whether the donated items are retained by the MREA and used for their tax-exempt purpose.
• Charitable remainder trust: In some cases, tangible personal property can be contributed to a charitable remainder trust. If you or a family member is an income beneficiary, you will receive a federal income tax charitable deduction when the property is sold. An additional contribution of cash or appreciated securities is recommended to cover expenses until the tangible personal property is sold.
• Donor advised fund: Gifts to donor advised funds are not limited to cash and securities. Tangible personal property such as valuable antiques, stamp, and coin collections, art, cars, and boats may be able to be gifted and sold to benefit your fund.
• Endowed gift: Create an endowment or contribute to one that is already established to ensure that your support of the MREA will last long after your lifetime.

Legacy Giving for the Business Owner: Closely Held Stock

Closely held stock* is most easily used to support our mission in the form of an outright gift. If the constituting documentation for the business permits additional owners and the business is debt-free, you can gift closely held stock to the MREA. The donation of closely held stock first requires you to value the interest in the business entity.

Review our additional considerations below to see if donating closely held stock is right for your legacy planning. Then, consult with your professional legal and tax advisors to see how to maximize the benefits of this tax-efficient strategy for making a difference.

Considerations to benefit from a donation of closely held stock:

• As the business owner, you hold the majority of shares in a closely held corporation.
• You want to avoid taxes when removing retained earnings from the corporation.
• You want to maintain a position of control in the corporation’s outstanding stock.
• You want to avoid capital gains taxes on the shares you donate to the MREA.
• You want to receive a federal income tax deduction for the full appraised value of the gift.
• You support our mission.

*A gift of closely held stock requires special handling, so you should always consult with your legal or tax advisor first.

How to use:

• Will or living trust
• Charitable gift annuity
• Charitable remainder trust
• Charitable lead trust

Full Impact Donations: Giving from a Commercial Annuity

Commercial annuities, like retirement plan assets, benefit from tax-deferred growth during the lifetime of the owner. However, distributions from commercial annuities are subject to income taxes at the time of withdrawal, which makes them among the best assets to leave to charity. As a 501(c)3 tax-exempt non-profit, the MREA can receive the full benefit of your donation from a commercial annuity, completely tax-free. The best way to give a commercial annuity in support of our work after your lifetime is to name us as beneficiary.

To make a gift from your commercial annuity, it is as simple as updating your beneficiary form with your bank or insurance company. You can designate the MREA as the primary beneficiary, for a percentage, or for a specific amount. You can also name us the contingent beneficiary, which transfers the balance of your annuity to the MREA in the event that your primary beneficiary does not survive you.

Simple transfers make a strong impact: Donating from your financial institution

You can designate the MREA as a beneficiary of your bank accounts, certificates of deposit, or brokerage accounts after your lifetime. There are two options available to use these accounts to make a gift to the MREA and support our mission:

Payable on death (POD):* POD designations on your bank account or certificate of deposit allow you to name one or more persons or charities as the beneficiary of an account’s funds once you, the account owner, pass away. Until then, the beneficiary you name has no rights to the funds and you remain in control of the account. You are free to use the money as you see fit, to change the beneficiary, or to close the account at any point during your lifetime.

Using a POD designation simplifies your estate planning and administration process. You can have peace of mind knowing that the account transfers automatically following your lifetime with no action required from the executor or administrator of your estate. Simply ask your bank representative about the one or two easy steps you need to take in order to place a POD designation on your bank account or certificate of deposit.

Transfer on death (TOD):* TOD designations on your brokerage or investment account will disburse funds to one or more persons or charities after your lifetime. This tool allows you to transfer a percentage of your account to the MREA’s mission, rather than the entirety. Like a POD account, with a TOD account the beneficiary you name has no rights to the funds until after your lifetime and until then, you are free to use the money in the account, to change the beneficiary, or to close the account.

Using a TOD designation also simplifies your estate planning and administration process. You can “set it and forget it” and the executor or administrator of your estate will not have to take any action to ensure that your securities transfer to whomever you designated. To set up the TOD endorsement, simply contact your investment advisor and provide instructions regarding the change.

*State laws govern payable on death accounts and transfer on death accounts. Please consult with your bank representative or investment advisor if you are considering these gifts.

Grow your investments and give tax fee: Retirement Plan Assets

You can grow your investments tax free during your lifetime using tools like your employee retirement plan, IRA, or tax-sheltered annuity. When a distribution is made from your retirement plan account to a beneficiary, that person will owe federal income tax. However, as a non-profit organization, we are tax-exempt and will receive the full amount of what you designate toward our mission.

How to use:

Beneficiary Designation: By contacting your plan administrator, you are able to designate the MREA as the primary beneficiary or the beneficiary of a specific percentage from your account after your lifetime. You can also make the MREA a contingent beneficiary so funds only transfer to the MREA in the event that your primary beneficiary doesn’t survive you.

Qualified charitable distribution (QCD): For individuals who are 70½ years or older, you can give any amount up to $100,000 annually from your IRA, federal income tax free, directly to a qualified charity such as the MREA. This popular gift option is also commonly called the IRA charitable rollover.

Charitable remainder trust: By funding a charitable remainder trust with your heavily taxed retirement plan assets, the trust will distribute funds to one or more named beneficiaries for life or for a set term of up to 20 years. After the designated time period, the remaining assets in the trust transfer to support the MREA. This gift provides excellent tax and income benefits for you and your family, as well as supports our mission.

Donor advised fund: Due to their tax-deferred nature, when retirement plan assets pass to your heirs, distributions are taxed as ordinary income. The income tax burden can diminish your intended gift but can be avoided by designating the funds to a qualified charity. By naming the MREA as the beneficiary of all or a portion of your retirement plan assets, your fund receives the full amount of the gift and bypasses any federal taxes.