A charitable bequest can dramatically reduce estate and inheritance taxes. A bequest to the Community Foundation allows for an unlimited charitable deduction and typically generates tax savings that can be passed to your heirs. 

In addition to bequests, there are other options for planned giving.

A Charitable Remainder Trust (CRT) is a trust that pays you (and/or another beneficiary) either a fixed or variable income for the beneficiary's life, or a fixed term not exceeding 20 years, or a combination of the two.  This is one of the most popular and meaningful ways to take care of your own family while supporting the charities that are important to you.

A Charitable Lead Trust (CLT) is the reverse of a charitable remainder trust. Such trusts can be created by a trust or will. You can stipulate that an annuity or unitrust payment be made to a fund at AAACF for a term of any duration, usually ten years or more, after which the principal is paid to you or to any other non-charitable beneficiary.  While you cannot receive an income tax deduction for the value of the assets placed in a CLT, the yearly income paid to AAACF is excluded from your taxable income during the trust term.  Also, if a donor dies during the trust term, the assets placed in a CLT are removed from his or her estate for tax purposes.

IRAs or Other Retirement Assets, such as 401(k) or 403(b) accounts, make excellent gifts. The amount paid to AAACF from a retirement account is 100% tax free and AAACF receives 100% of the retirement assets. All other beneficiaries pay ordinary income tax, both state and federal, on a retirement account distribution at their highest marginal rates.  If a donor's taxable estate is greater than $2 million, the retirement account balance may be subject to estate tax upon the donor's death.

You can also support the causes and charities you believe in by assigning a Life Insurance Policy to the Ann Arbor Area Community Foundation. Often people purchase life insurance when they need protection either for their family, business or estate. Later in life they may find that they do not require as much insurance and can find it desirable to use insurance policies for charitable gifts.

Please contact Judi Peters, AAACF Development Director, at 734-663-0401 or jpeters@aaacf.org if you have questions or would like addition information.