Gift Planning

Our gift planning tool outlines your gifting options. Please contact our office at 605-665-3655 with any questions.

Bequests

You may make a gift of cash, securities, real estate, or other assets by providing in your will for a bequest to
Sacred Heart Parish, St. Benedict Parish and/or Sacred Heart School. Your gift may be a specific bequest of a designated
sum or asset, or it may be a percentage of your residuary estate. A neat idea is to treat the church or school as one of
your children!

The value of your bequest to Sacred Heart Parish, St. Benedict Parish or Sacred Heart School is fully deductible for tax
purposes. You may also establish an income-producing planned gift for the benefit of others through your will, thereby
reducing your taxable estate. A bequest (whether outright or to fund a planned gift) can be a useful and advantageous
addition to your estate plan.

Charitable Gift Annuities

A charitable gift annuity is a contract between you and the church. In exchange for your
irrevocable gift of cash or securities, the church agrees to pay you a fixed income each year for your lifetime (or, in the
case of a joint annuity, for your life and that of another annuitant, such as your spouse). These can be set up to provide
immediate payments or deferred payments.

Charitable Lead Trusts

A charitable lead trust would allow you to make a significant gift to Sacred Heart Parish, St.
Benedict Parish or Sacred Heart School, minimize your taxable estate, and pass assets on to non-charitable beneficiaries,
such as children. A charitable lead trust works by first using the assets contributed to the trust to make annual payments
to the parishes or school for a term of years (usually 10 to 20). At the end of the term, the assets remaining in the trust
pass to the non-charitable beneficiaries, without passing through your estate.

Charitable lead trusts are fairly complex and there are many things to consider. An attorney will need to be
involved. However, with proper thought and preparation, a charitable lead trust can be an excellent way for you to reach
personal, charitable and tax-planning goals.

Charitable Remainder Trusts

  • Annuity Trust - An annuity trust can be established by transferring cash or securities in trust to the parishes or school. If you select the church as trustee, it manages the trust for you and/or other designated income beneficiaries.  The trust provides you with an annual fixed income amount that is at least 5 percent of the initial fair market value of the trust assets. These fixed payments continue for your life and the lives of any other beneficiaries. Any income earned by the trust that exceeds the annuity (fixed income) amount is added to the trust principal. If trust earnings are insufficient to meet the annuity amount, principal is used to make up the deficit.

  • Unitrust - A charitable remainder unitrust is similar to an annuity trust but is more flexible and offers potentially higher income possibilities. Unlike the fixed payments from an annuity trust, the annual income from a unitrust is a fixed percentage of the fair market value of the trust assets, as revalued each year. Furthermore, additional contributions may be made to a unitrust at any time. If you are considering a gift of real estate, a unitrust may be an effective way to generate your flow of income from the property.

  • Term Trusts: Income for a Specified Term of Years - A term trust may take the form of an annuity trust (fixed payment) or a unitrust (fixed percentage of the trust’s annual fair market value), with the same advantages as a life income trust. If you use appreciated property to fund the trust, you avoid capital gains tax liability on the transaction, the beneficiary’s income may be taxed at ordinary and capital gains rates, and some income may be tax-free. As a donor, you receive a charitable deduction based on the value of the property given, the payout rate, and the term of years. Recipients of the income may be anyone designated by the donor.

Donor Advised Funds

A donation can be made at the Foundation Office and they will invest the funds into your choice of either the Ave Maria Rising Dividend Fund or the Vanguard Wellington Fund. Click on either fund name for more detailed information.

The donation is fully tax deductible when donated at the Foundation office but you advise on the distribution of the funds to local Catholic charities. As a general rule you can distribute 4% per year and the fund balance will be stable or possibly grow. If the balance grows, your 4% annual distribution actually will increase. Successor advisors can be named so the fund can continue well into the future.

Gifts of Real Estate

A gift of real estate to Sacred Heart Parish, St. Benedict Parish or Sacred Heart School is a unique way to provide a lasting benefit to the Catholic Church. It is also a convenient way for you to enjoy a charitable deduction based on the current fair market value of your property and to reduce the size and complexity of your estate. An added benefit is that in most cases, all aspects of its sale are handled by the church.

Not only can real estate be used to make outright gifts, it can also be used to make future gifts to church. For example, should you wish to gift a piece of real estate now but still desire to live in or continue to vacation in the property for the rest of your life, you may do so. On the other hand, if you have a need for current income, you may wish to use a piece of real estate that you no longer wish to use to fund a trust which will provide valuable financial support to you and your family for years to come.

Gifts of Securities

More to come.

Gifts of Retirement Plan Assets
Many Americans hold a significant percentage of their wealth in their retirement plan accounts, such as a 401(k) plan or IRA. The assets in these accounts grow tax-free over time but have significant built-in tax liability. Accordingly, a large percentage of the assets in the accounts will be lost to tax if the account is left to someone other than your spouse upon your death; however, using these assets for charitable gifts at death can be advantageous for tax purposes.

Income tax is triggered when the assets are taken out of a retirement account—either when you make a withdrawal during your lifetime or when the account is distributed upon your death. Additionally, if there are assets inside the account upon your death, they will be included in your estate for estate tax purposes. The income and estate tax liability amounts to a double taxation on the assets in the account.

Currently the combination of federal estate and income taxes on a retirement account can exceed 64 percent. Your child(ren) or other beneficiary will only receive 36%!

Contrast this scenario to a situation where you designate St. Benedict Parish, Sacred Heart Parish or Sacred Heart School as the beneficiary of your retirement account. Your estate would receive a charitable deduction for the entire amount of the account, which will leave a larger balance of the estate for your other intentions. Further, because the Catholic Church is a tax-exempt charity, it will not have to pay income tax on the distribution and would receive the entire $1,000. Consult with your legal and tax advisers for advice on the consequences of your gift.

Life Income Gifts

More to come.
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If you have provided for St. Benedict Parish, Sacred Heart Parish or Sacred Heart School in your estate plans but have not previously notified the Foundation Office of your intentions, please contact Tim at 605-665-4585.

Sharing your plans with us allows us to express our gratitude to you during your lifetime, ensures that your wishes will be met, and also assists Sacred Heart Parish, St. Benedict Parish and Sacred Heart School in long-term planning efforts.