Planned Giving: Make the Gift of a Lifetime

Hertz Fellow Katie Bodner

There are many creative ways to support the Hertz Foundation that cost you nothing right now. Whether you are interested in a simple gift through your retirement or life insurance plan, a traditional bequest through your will or trust, or perhaps a gift that pays you back, like a charitable gift annuity—there are many ways to make a legacy gift. Explore how you can include us in your estate plans and benefit from becoming a member of The Order of Magnitude.

Bequests: A Gift Through Your Will

After providing for loved ones, you can direct that a portion of your estate be devoted to charitable interests. There is no limit to the amount of charitable gifts that are deductible for gift and estate tax purposes. You can leave a specific dollar amount or specific property, a percentage of your estate, or what's left of your estate after other bequests and taxes are satisfied. Estate planning documents should be prepared in consultation with your attorney and with the Foundation.

Sample bequest language:
I hereby give to the Fannie and John Hertz Foundation the following described property: __________, to be used to advance the Foundation's mission.

Charitable Remainder Trust (CRT)

A Charitable Remainder Trust is a tax-exempt trust that can pay income for life to you or a family member, with the remainder going to the Hertz Foundation. Since a CRT is tax-exempt, it is most often used by donors wishing to donate a highly-appreciated asset. A CRT can sell the asset free of capital gains tax, allowing you to earn income from the full sales proceeds. In addition, funding the CRT will generate an income tax deduction for the present value of the gift to the Foundation.

There are two types of CRTs:

  • Annuity Trust: Pays a fixed dollar amount determined on the first day of the trust.
  • Unitrust: Pays the income beneficiary a fixed percentage of the trust's value as determined each year.

Life Insurance

A life insurance policy that is no longer needed for its intended purpose can become an excellent charitable gift. Directors of a company often are offered a life insurance policy as a component of their compensation, and charitable organizations are made the beneficiary. In addition to providing income tax savings today, gifts of all or a portion of the value of the life insurance can result in estate tax savings.

Retirement Plan Assets

A popular way to transfer IRA assets to charity is through a tax provision that allows IRA owners who are 72 or older to give up to $100,000 per year of their IRA distributions to charity. These distributions are called qualified charitable distributions, or QCDs. The money given to charity counts toward the donor’s required minimum distributions (RMDs), but doesn’t increase the donor’s adjusted gross income or generate a tax bill.

So while QCDs are exempt from federal income taxes, other traditional IRA distributions are taxable (either wholly or partially depending on whether you’ve made any nondeductible contributions over the years).

Unlike regular charitable donations, QCDs can’t be claimed as itemized deductions.

In addition, keep in mind that charitable contributions don’t yield a tax benefit for those individuals who no longer itemize their deductions (because of the larger standard deduction under the Tax Cuts and Jobs Act). So those who are age 72 or older and are receiving RMDs from IRAs may gain a tax advantage by making annual charitable contributions via a QCD from an IRA. This charitable contribution will reduce RMDs by a commensurate amount, and the amount of the reduction will be tax-free.

In addition, you can name the Hertz Foundation as the beneficiary of your retirement plan account, either through the plan directly or through a a bequest in your will. Retirement plan assets are ideal to fund a charitable gift at death, as such a gift avoids both estate and income taxes that can reduce the final value of the retirement plan.

The Order of Magnitude

When Fannie & John Hertz established the Hertz Foundation through their estate plan, they understood that their initial investment would reap outsized impact for years to come. Today we celebrate their philanthropic vision through The Order of Magnitude, a special group of Hertz Foundation donors whose planned gifts will advance that vision exponentially in the decades to come.

Benefits include:

  • Special recognition at events and in Hertz publications
  • Special communications throughout the year
  • Invitations to exclusive events just for members

Contact: Jayne Putnam Iafrate, CFRE Email or call 925.583.2411