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FACF's mission is to improve the quality of life by connecting donor interests with community needs.

Fremont Area Community Foundation
605 N. Broad Street, P.O. Box 182
Fremont, NE 68025
(402) 721-4252
Fax: (402) 721-9359
Contact Us

Tax ID 47-0629642

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You Are Here: Giving > Tax-Advantaged Giving

Tax-Advantaged Giving

The following types of gifts may offer tax advantages to the donor. The Foundation can supply more information about these options, and we also advise consultation with your tax advisor and/or attorney.

Life Insurance

With the Fremont Area Community Foundation as owner and beneficiary, whole life insurance is a simple, economical way to give to the Foundation. Premiums are deductible for income tax purposes, or the donor may claim a charitable deduction for the accumulated cash value for a paid-up policy.

Retirement Fund Bequest

Contributions to a 401K or 403K plan which become part of a person’s estate are subject to both estate and income taxes to the heirs. As a general rule, it is better to give these taxable assets to a tax-exempt charity, such as the Foundation, and to give other assets to heirs. Even in estates totaling less than $1,000,000, where there is no federal estate tax, an heir will pay income tax on distributions from retirement plans. Other types of inherited assets, such as publicly traded securities, are not subject to income tax. Thus it can be more expensive to give retirement plans to heirs than to give them other assets.

Life Income Plans

The following are examples of types of plans which can provide income for you or your beneficiary, while saving taxes and generating working capital for the Foundation:

1. Charitable Remainder Annuity Trust. A charitable remainder annuity trust is an individualized life income plan for donors aged 60 or older. The plan pays a fixed income to the donor or surviving beneficiary of 5% or more of the initial fair market value of the trust’s assets. After a stated period, the remainder passes to the Foundation. This kind of plan is especially valuable for donors using appreciated property, because the assets can be sold free of capital gains tax; thus the full value of the property can be reinvested to produce income. The donor may receive current and future income, capital gains, and estate tax benefits from the gift. A charitable remainder annuity trust can be established with an initial gift of $25,000 or more.
2. Charitable Remainder Unitrust. The charitable remainder unitrust is an individualized life income plan for donors aged 45 or more. The plan pays either fixed or variable income to the donor and/or survivor beneficiary of 5% or more of the fair market value of the trust’s assets. The plan is especially valuable for donors using appreciated property, because the asset can be sold capital gains tax free, thus the full value of the property can be reinvested to produce income. The donor receives current and future income, capital gains and estate tax benefits for the gift. A unitrust can be established with an initial gift of at least $25,000. Additions to the unitrust can be made at any time.
3. Deferred Annuity. With this instrument, the donor makes a gift to the Fremont Area Community Foundation, which pays an annual annuity to the donor or surviving beneficiary after a set amount of time.
4. Charitable Lead Trust. When substantial ($25,000) funds are involved, a donor may establish a charitable lead trust. The donor “lends” the funds to the Foundation, and the income from the funds becomes the charitable donation. At the end of the trust period, the principal reverts to the donor or to anyone the donor designates. Typically this type of trust is set up with tax exempt securities. Although the income goes to the Foundation, because it is a grantor trust the income is taxed to the grantor; therefore tax-exempt securities are recommended. A charitable lead trust, when the term of years expires, may, for example, go to children or grandchildren. It may help to reduce or eliminate the tax costs of transferring assets from one generation to another. It is called a lead trust because the Foundation is in a lead position. It gets paid first, which is the reverse of the Charitable Remainder Trust.
5. Testamentary Trust. You establish a trust fund which provides that part of your estate be set aside and managed by the Fremont Area Community Foundation. This fund can provide a lifetime income for your beneficiaries. The principal goes to the Foundation after their death.