Wills, Trusts, and Annuities

Frequently Asked Questions

1. What assets can I use to make a gift to the American Heart Association?
Generally speaking, during your lifetime you can make an outright gift of cash, securities or other property (e.g., real estate).

Through your will or with a distribution from a retirement plan or life insurance policy, your gift can be designated to the American Heart Association in accordance with your wishes.

2. What sort of gift plans also return income to me?
You have the option of making a gift that returns income to you, your spouse, or other individuals, such as a charitable gift annuity, or charitable remainder unitrust or annuity trust.

3. What tax deduction will I receive for my gift?
Your tax benefits will depend on several factors: the type of gift, the time at which it is made, whether it is outright or deferred or has any income payments. In general, though, here are some guidelines:

  • Outright gifts to generate a full income-tax charitable deduction. Outright gifts of appreciated securities are deductible at fair market value, with no recognition of capital gains -- a great tax benefit!
  • Bequests do not generate a lifetime income tax deduction. They are exempt from estate tax.
  • Similarly, life insurance distributions to are not income-tax deductible, but are exempt from estate tax. If you have made us the irrevocable owner and beneficiary of a policy during your lifetime, you may deduct annual gifts that offset premium payments (for more details on this point, see Question 4 below).
  • The charitable deduction for a gift that returns income to you, such as a charitable gift annuity or a charitable remainder trust, is the fair market value of the gift asset minus the present value of the income interest you retain.

4. I want to set up a life insurance policy, name the American Heart Association as beneficiary, but retain ownership of the policy. Can I deduct the premium payments I make?
No. The IRS would not consider that a "completed gift" – they'd say that, as the owner of the policy, you could change the beneficiary designation to a friend or family member. We must be made the irrevocable owner of the policy for gifts offsetting premium payments to be deductible.

5. I’ve heard that transferring gifts of retirement-plan assets to charity is advantageous. Why?
Qualified retirement plans such as IRAs, 401(k), 403(b), and Keoghs allow individuals to defer paying taxes on a portion of their income until the assets are withdrawn during retirement years. However, after a person's death, these accounts are often exposed to income and estate taxes, at a combined rate that could rise to 75% or even higher on large taxable estates. The tax will be paid at some point—by your estate and your heirs unless contributed to charity. In other words, by giving retirement assets to charity you receive double benefits. Your estate and heirs will not be taxed on the portion that goes to charity and you will support !

6. I'm interested in establishing a charitable gift annuity. What financial provisions will you make for the income payments to me and my spouse?
Your charitable gift annuity will be treated as a general obligation of the American Heart Association, backed by all of our assets. We have an unbroken record in making timely payments to our annuitants, and that ongoing responsibility is a key element in our financial policies.

7. If I create a bequest or life-income gift, will you continue to ask me for annual contributions?
Your planned gift is a significant addition to our long-term financial strength and our ability to meet the challenges and opportunities the future will bring. However, today's efforts are supported through annual gifts and we greatly appreciate and encourage any annual support you may want to consider.

Have Questions?

Contact your Charitable Estate Planning Representative to discuss your options.


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American Heart Association’s
Tax Identification Number

13-5613797
 

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