Donors who wish to make a contribution to House of Ruth can transfer appreciated assets, in lieu of cash, to House of Ruth, realize a tax deduction in the year of their gift and avoid capital gains tax at the same time.

Wills - A will is a legal document, which contains specific instructions to the Probate Court as to how property is to be administered and distributed after death.  Bequests to charities are not subject to estate or inheritance taxes.  Bequests take a variety of forms—a specific sum of money, a percentage of an estate, or a certain piece of property.  By naming the House of Ruth as a beneficiary, the donor continues to fund critical services for battered women and their children.

Living Trusts
A living trust is similar to a will except that assets are transferred into the trust with instruction for the management and distribution of the assets upon incapacity or death.  

Charitable Gift Annuity
A gift annuity is a contract between the donor and a tax-exempt charitable organization in which assets are transferred to the organization and the donor receives, in return, a percentage of the value each year.  Because the agreement is between the donor and House of Ruth, the charitable organization is responsible for maintaining the annuity payments.  Payments are backed by the full faith of House of Ruth.

With an initial gift of as little as $5,000, the donor may start drawing down income immediately.  The annuity rate is based on his/her age.  S(he) receives significant tax advantages, including an immediate charitable tax deduction; a portion of the income payment may be considered a tax-free return of principal.  This gift permits a significant contribution while, at the same time, providing for the donor’s current income needs.

Charitable Remainder Trusts
With a charitable remainder trust the donor transfers assets in return for income for a lifetime.  S(he) gains an immediate income tax deduction, reduces estate taxes, increases income from assets, provides for a spouse and heirs, and possibly eliminates capital gains taxes.  There are two principal kinds of charitable remainder trusts:

Annuity Trust: This trust will pay the donor, year after year, the same dollar amount established at the onset of the trust.  The income payments are fixed, based on starting valuation.  If necessary, some of the distribution can be paid from principal, though this would reduce your ultimate gift to the charitable organization.  However, any yield in excess of the required payout is retained by the trust, increasing your contribution.

Unitrust: This trust is appropriate for donors who like the idea of an annuity during retirement but are concerned that inflation will diminish the value of a fixed income.  The Unitrust allows them to specify a percentage—the minimum is 5%—of the trust assets to be paid out each year for a lifetime, rather than a fixed dollar amount.  Should assets grow, the income will grow as well.

This information is not intended as legal advice. House of Ruth will be glad to work with your financial and/or legal advisor.  House of Ruth is working in partnership with The California Community Foundation to invest and administer deferred gifts.

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