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Published October 2004 When you give to charity, everyone benefits By
Jessica Pavish “If you haven’t got any charity in your heart, you have the worst kind of heart trouble.” These words, spoken by Bob Hope, reflect the feelings of millions of Americans. Each year, donations to religious, civic and educational institutions help feed malnourished children, give families in need a helping hand and provide neighborhood children a safe place to play after school. In short, they help make this world a bit brighter for us all. Many of us would like to do more if we could. If you feel this way, here are two ways, beyond strictly cash donations, that you can contribute. Donate appreciated
stocks Establish a charitable
remainder trust Here’s how it works: You contribute appreciated assets — stocks, real estate, etc. — to the charitable remainder trust. The trust sells the assets and uses the proceeds to purchase a portfolio of securities. The trust then pays you an income stream for life, and the organization receives the principal upon your death. By setting up such a trust, you avoid capital gains tax, and you can claim a deduction on your current-year taxes. Furthermore, because you’re moving assets from your estate, your beneficiaries will have fewer estate taxes to pay. What about my heirs?
If you’d like to avoid this, consider purchasing an insurance policy in an irrevocable life insurance trust. Because the trust actually owns the insurance policy, the proceeds are kept out of your taxable estate and your heirs will owe less in estate taxes. You also can direct the trust to provide your heirs with regular income. Before establishing a trust, consult with your legal adviser to learn the full advantages and disadvantages of these complex estate-planning instruments. Everyone is a winner
Regardless of which option you choose, you’ll be helping a valued institution and yourself. In short, everyone benefits. Jessica Pavish is an investment representative with Edward Jones in Everett. She can be reached by calling 425-257-1264. Edward Jones is an NYSE-member investment firm with more than 9,000 locations nationwide. Back to the top/Reaching Out Main Menu
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©
2004 The Daily Herald Co., Everett, WA
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