What is a bequest?

‍A bequest is a gift by will of personal or real property. A will is a legal document by which a person makes a disposition of his or her property to take effect after his or her death, and which by its own nature is ambulatory and revocable during his lifetime. You may name  the Paducah Symphony Orchestra in your will to receive a charitable bequest.

How will the Paducah Symphony Orchestra use my bequest?

‍You can make an unrestricted gift, or you can restrict the use of your gift to a purpose that you designate.

An unrestricted charitable bequest provides funds that the PSO can use for general purposes. This type of bequest can be of greatest use to the PSO because it allows the PSO to determine the areas of greatest need.

Your gift could also be restricted to specific uses that you designate. A restricted charitable bequest permits the PSO to use your gift only in a specified manner, for example, for a certain program. The gift may be added to the endowment with income only to be used for the specific purpose. Or, the entire gift may be designated for a specific purpose. It is wise to have any such restriction as broadly defined as possible, which insures that the ability to use the gift as designated will not be frustrated because of changing circumstances. It is best to work with the PSO prior to making a bequest limited to a specific use, so that there is assurance that the PSO will be able to comply with the restriction.

If you choose to make a restricted bequest, you may restrict the gift to using income only; or you may restrict the entire gift to be used for a specific purpose only.

Are there different kinds of bequests?

‍There are a number of different ways to make a bequest. These are a few of the more common methods. Each of these examples is shown as being unrestricted. Each type of bequest could also be restricted to a specific purpose, if you so choose.

The Paducah Symphony Orchestra does not render legal, tax or other professional advice. You should always seek advice from an attorney and other professional advisors when considering making a charitable gift. Please contact Executive Director Reece King or call the office at 270-444-0065.

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What is a Charitable Gift Annuity?

‍A charitable gift annuity is a life income plan that allows you to give a gift to support the work of the Paducah Symphony Orchestra while still receiving an annuity income for your lifetime. A charitable gift annuity is a contract between you and the Paducah Symphony Orchestra. You are making a gift to the Paducah Symphony Orchestra, and you are purchasing a fixed income for life. You irrevocably gift the amount to the PSO, and the PSO in return agrees to pay you a fixed payment for life. The charity promise to pay is backed by all of the assets of the organization. Following your lifetime, the remainder portion of your gift comes to the Home to help us fulfill our mission.

How Do You Determine the Amount of the Annuity Payment?

‍The Uniform Gift Annuity Rates, which are recommended by the American Council on Gift Annuities (a voluntary association of 25 members representing over 700 Gift-Annuity-issuing agencies), have been computed with the intention of producing, if possible, a remainder interest to the charity of approximately 50% of the original gift amount. For this reason, the rates are generally lower than what you might find offered by an insurance company (where there is no gift involved). The rates are based on actuarial studies of the life expectancy of gift annuitants and on the expected rate of income to be earned on invested reserve funds.

The annuity payment is based on your age (and the age of any other annuitant you might name) the day you make the gift, and on the amount of your gift. Following your lifetime, the remainder of your gift becomes available for the use of the PSO. Payments may be made in annual, semi-annual, quarterly or monthly installments. The timing of your installments may affect the amount of your payment.

Why Would I Want A Gift Annuity?

‍There are many benefits, not the least of which is potential favorable tax benefits and the joy of making a gift that you know will provide support to the mission of the PSO following your lifetime. Charitable gift annuities make it easier to make a substantial gift during your lifetime, because you will be receiving a fixed income stream for life. Typically, part of each payment that you receive will be tax-free, increasing each payment's after-tax value. You may qualify for a federal income tax charitable deduction for the fair market value of your gift, minus the present value of the annuity payments that you are estimated to receive over your lifetime.

Long-term (held for more than a year) appreciated assets, such as stock, that are not currently paying a dividend are an excellent choice for using to acquire a gift annuity. You will avoid paying the capital gains tax on the transfer of those assets, as they are being irrevocably gifted to charity, and you will begin to receive an income stream in the form of annuity payments.

What Else Should I Know?
You must understand that your gift to the Paducah Symphony Orchestra through a charitable gift annuity is irrevocable, that is, you cannot change your mind once the gift is made.

Once you have entered into the gift annuity contract with the PSO, the amount of your payments will always remain the same. You can set up new gift annuities at any time.

A gift annuity contract can be written to pay you alone, or to pay you first, and then your spouse, or it may pay any two persons you select. Payments can be made either to one annuitant for their lifetime and then to a second annuitant for their lifetime, or they can be made jointly to both annuitants and then to the survivor. Due to the longer payment period, two-life annuity rates are slightly lower than those for a single life.

The Paducah Symphony Orchestra does not render legal, tax or other professional advice. You should always seek advice from an attorney and other professional advisors when considering making a charitable gift. Please contact Executive Director Reece King or call the office at 270-444-0065.

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A Charitable Remainder Trust:

Is an irrevocable trust will pay you income for your lifetime or for a term of years that you select (not to exceed 20 years) offers payments that can be made either to you, or to one or more income recipients that you select. following your lifetime, assets that remain in the trust will come to the Paducah Symphony Endowment to further our mission to bring the rewards of great music to a growing and diverse regional audience.

Annuity and unitrusts are the two types of charitable remainder trusts. These two types of trusts are very similar in many respects. The primary difference is in the way the income payout is calculated. With both types of trusts, the value of the charity, remainder interest must be at least 10% of the initial fair market value of all property placed in the trust.

The Paducah Symphony Orchestra does not render legal, tax or other professional advice. You should always seek advice from an attorney and other professional advisors when considering making a charitable gift. Please contact Executive Director Reece King or call the office at 270-444-0065.

The Net Income With Make Up (NIMCRUT) charitable remainder unitrust distributes the stated percentage each year, whether or not the trust has actually generated enough income to meet that amount. The deficit is made up from the trust principal in those cases. The Flip or Type II charitable remainder unitrust pays all of the trust income for the taxable year, in lieu of the specified unitrust payment amount, as long as such income is less than the stated percentage. Such a unitrust is most appropriate for a gift of real property or other non-liquid assets. The trust then flips to a regular unitrust when the asset is sold and there are more liquid assets in the trust to provide income.

Annuity and unitrusts are the two types of charitable remainder trusts. These two types of trusts are very similar in many respects. The primary difference is in the way the income payout is calculated. With both types of trusts, the value of the charity‚ remainder interest must be at least 10% of the initial fair market value of all property placed in the trust.

What is An Annuity Trust?

‍A charitable remainder annuity trust provides for a fixed annuity payment of not less than 5% of the initial value of the trust assets to one or more persons, with an irrevocable remainder interest contributed to Home of the Innocents upon the termination of the trust. You will set the percentage at the time the trust is established. What affects the amount of the charitable contribution you can claim on your income tax return, and other tax consequences concerning your gift is the percentage you select when you set up the trust, and the age(s) of the income recipients. You can choose whether to have your payments made on a monthly, quarterly, semi-annual or annual basis. The annual payment never varies, regardless of the income the trust assets earn, or appreciation or depreciation in the value of the trust assets.

You will not be allowed to make additional contributions to your annuity trust, because your payments are fixed and are based upon the value of your initial gift. You may, however, establish as many additional annuity trusts as you want.

What is A Unitrust?

‍A charitable remainder unitrust is very similar to an annuity trust, except that the annual payout generally is a fixed percentage of not less than 5% of the value of trust assets (which are valued annually). You will set the percentage when you make your initial gift. In general, the unitrust amount (your payment) rises and falls as does the value of the trust assets. Because trust assets are re-valued every year, your payments will change each year. With this trust option, you may enjoy an increase in your trust payments over the years if the value of the trust assets increases. There are some different types of unitrusts:

• The Net Income With Make Up (NIMCRUT) charitable remainder unitrust distributes the stated percentage each year, whether or not the trust has actually generated enough income to meet that amount. The deficit is made up from the trust principal in those cases.
• The Flip or Type II charitable remainder unitrust pays all of the trust income for the taxable year, in lieu of the specified unitrust payment amount, as long as such income is less than the stated percentage. Such a unitrust is most appropriate for a gift of real property or other non-liquid assets. The trust then flips to a regular unitrust when the asset is sold and there are more liquid assets in the trust to provide income.
• Annuity and unitrusts are the two types of charitable remainder trusts. These two types of trusts are very similar in many respects. The primary difference is in the way the income payout is calculated. With both types of trusts, the value of the charity‚ remainder interest must be at least 10% of the initial fair market value of all property placed in the trust.

The Paducah Symphony Orchestra does not render legal, tax or other professional advice. You should always seek advice from an attorney and other professional advisors when considering making a charitable gift. Please contact Executive Director Reece King or call the office at 270-444-0065.

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What is a Life Insurance Gift?

Life insurance gifts are simple; just ask the insurance company for the appropriate forms to make the Paducah Symphony Orchestra owner or beneficiary of a policy. Gifts of a policy are tax deductible, as are future premium payments. A gift of life insurance is certain. The full proceeds are payable to ensure your charitable dreams are fulfilled. Life insurance is paid promptly; it is not tied up in the administration of the estate. Unlike a will, life insurance is not a matter of public record. Your gift to the Paducah Symphony Orchestra can pass in privacy, if you desire.

Life insurance can be used to make a significant gift to the Paducah Symphony Orchestra with exceptional tax advantages.

Types of Life Insurance Gifts

A Gift of an Unneeded Policy Suppose your family is grown and no longer needs a policy purchased many years ago. You could make the Paducah Symphony Orchestra the owner and beneficiary of that insurance policy and take a tax deduction for the value of the policy at the time of the gift. Let's assume further that you have a $50,000 policy on which you are still paying, and the cash surrender value of your policy is $20,000 and the premiums cost $500 annually. If you contribute the policy to the Paducah Symphony Orchestra and continue paying the premiums, you will be entitled to an income tax charitable deduction of about $20,000, reducing your taxes by $6,200 if you are in a 31% tax bracket. In addition, each year you will be entitled to another $500 deduction for the annual premiums you pay, saving $155 in income taxes. At your death, the full $50,000 proceeds will be used by the Paducah Symphony Orchestra to further our mission. You may prefer for the Paducah Symphony Orchestra to continue making the premium payments, or to sell the policy and use the proceeds immediately so that you can see your charitable dreams comes true.

‍Wealth Replacement Plans Donors who employ various types of charitable trusts can purchase life insurance payable to family members, funded partly by tax savings from their charitable deductions. The life insurance replaces the assets that are received by the charity, and if you employ a so-called irrevocable life insurance trust, your family can receive the insurance proceeds free of gift or estate tax.

‍Revocable Beneficiary Designation You can keep lifetime ownership rights in a policy (the right to borrow against or cash in a life insurance policy, for example) and still name the Paducah Symphony Orchestra or another charitable organization as the beneficiary of part or all of the proceeds. Your estate will be entitled to a charitable deduction for the amount passing to us. If you prefer, you can name the Paducah Symphony Orchestra as contingent beneficiary of a life insurance policy. The PSO would receive the proceeds only if your primary beneficiary died before you.
Gifts of a New Policy It may also be possible to make an important gift to the Paducah Symphony Orchestra with the purchase of a new policy on your life. Some plans even provide a mechanism for providing insurance for you and a potential gift to the PSO with the payment of premiums by a third party.

The Paducah Symphony Orchestra does not render legal, tax or other professional advice. You should always seek advice from an attorney and other professional advisors when considering making a charitable gift. Please contact Executive Director Reece King or call the office at 270-444-0065.

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The PSO has a fund in the West Kentucky Community Foundation to allow the PSO more options to maximize the tax benefits of your gift. If you would like to take advantage of this unique tax credit, please contact Executive Director Reece King or call the office at 270-444-0065.