SBMM Flagship Society Old

1) Bequests

You can establish a legacy that will reflect your commitment to maritime history and culture by including SBMM in your will or living trust. Bequests to SBMM are generally exempt from federal or state inheritance taxes, and subject to an unlimited deduction. Please consult with your financial and tax advisors (take out comma here) in selecting a program or specific target for such a bequest. Investopedia: more info on bequests

Q: How do I leave a gift in memory of a certain person for a specific purpose?
A: A gift by bequest is a wonderful way to memorialize a loved one or recognize someone who has made a difference in your life. Through your will or a trust, you can arrange the gift just as you would while living.

Q: What language do I use for my Bequest?

A: Unrestricted Bequest
I bequeath to the Santa Barbara Maritime Museum, of Santa Barbara, California, a qualified exempt charity, an amount equal to $_______ as an unrestricted bequest.

A: Specific Bequest
I bequeath my ______, further described as _______, to the Santa Barbara Maritime Museum of Santa Barbara, California, a qualified exempt charity.

A: Residue of the Estate
I devise and bequeath __% of the remainder and residue of property owned at my death, whether real or personal, and wherever located, (comma here) to Santa Barbara Maritime Museum, a qualified exempt charity.

A: Specific Purpose

This bequest for devise shall be used by the Santa Barbara Maritime Museum, a qualified exempt charity, for the purpose of__. If at a future time, the governing board of Santa Barbara Maritime Museum determines that it is no longer possible or practicable to make such use of the property, then that governing board shall use the property for the exempt purposes of the charity that, in the opinion of such board, are similar in general purposes to this specific request.

2) Life Insurance Policy
Naming SBMM as a primary beneficiary of your life insurance is a simple way to provide support without giving up current assets. You may also create a new policy or transfer ownership of your existing life insurance policy to the SBMM and receive an immediate charitable gift deduction. If you continue making premium payments to maintain the policy, those payments are tax deductible. Investopedia: more info on giving to charity through a life insurance policy

3) Individual Retirement Account (IRA) - article by Greg Smith
Naming SBMM as a beneficiary of your IRA is a very tax-efficient way to make a charitable gift. In fact, retirement plans and IRAs should be the first asset considered in planned giving. Retirement funds are pre-tax and when funds are withdrawn by the owner they are taxed at typically higher ordinary income tax rates. At the owner’s death, whatever remains in these plans does not escape taxes and is subject to both income tax to the beneficiary, and estate tax to the owner. In the highest estate tax bracket this could reduce the value of your retirement funds by 70 percent or more! Making a gift via your IRA or retirement plan is simple to do and can be changed if your financial or estate plans change. Investopedia: more info on giving to charities through retirement funds

4) Charitable Remainder Trusts (CRT)

A charitable remainder trust can be used to bypass capital gains taxes on the sale of highly appreciated assets, generate an increase in income, receive a charitable income tax deduction, and help you fulfill your philanthropic objectives. Typically, highly appreciated property or marketable securities are donated to a Charitable Trust which subsequently pays a fixed income to a designated beneficiary until the donor passes away, at which time any funds remaining in the trust are then donated to the SBMM. You avoid any capital gains tax on the donated assets, and you receive an income tax deduction in the year the trust is created. In addition, the donated asset(s) are removed from the estate, reducing subsequent estate taxes. While this contribution is irrevocable, you may have some control over the way the assets are invested, and may even switch from one charity to another (as long as it’s still a qualified charitable organization). CRTs come in two main types: charitable remainder annuity trust (which pays a fixed dollar amount annually) and a charitable remainder unitrust (which pays a fixed percentage of the trust’s value annually). Investopedia: more information on CRTs 

Charitable Lead Trust
Some individuals with a potential tax liability have charitable intent but would like to provide for their beneficiaries at a later time. Charitable lead trusts are essentially the opposite of Charitable Remainder Trusts. In this type of gift, a donor contributes an asset to an irrevocable trust. The trustee pays an income to the charity for the donor’s lifetime or a specified time period. At the end of the term the trust property is distributed either back to the donor or to the donor’s heirs. The primary advantage of this arrangement is that the property contributed to the lead trust is valued for estate and gift-tax purposes as of the date of the contribution. For assets that are likely to appreciate substantially in value over time, a donor may wish to remove it from their estate now by contributing it to a lead trust. Investopedia: more info on charitable lead trusts

5) Donor Advised Fund
A donor advised fund (DAF) is a charitable giving program that allows you to combine the most favorable tax benefits with the flexibility to support your favorite causes. Investopedia: more information on donor advised funds

Q: Who can help me arrange a bequest or life income gift?
A: If you have a professional financial advisor, lawyer, accountant or other trusted tax advisor, we recommend that you talk to him/her about your gifts and interests to ensure that your investment offers maximum benefits to you and the SBMM. If needed, the SBMM Museum can direct you to volunteer advisers assisting our staff and Board. SBMM cannot render any type of legal or tax advice.