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Welcome to Hillcrest Planned Giving
 Thank you for your interest in Hillcrest. Our hope is to serve you and your family with helpful information. We have an increasing number of friends at Hillcrest who now are benefiting from life income gifts, gift annuities and other plans. Thank you for taking the time to explore the benefits of gift planning.
Solution for Problem Real Estate
The problem with real estate is that "the bubble" burst and values have gone down. But is there a way to recover some of the value you have lost in your real estate investments?
The answer is: Yes.
John and Mary Donor own a second home in the desert. They are 74 and 75, don't visit the desert as much as they used to, and find that the upkeep on the house is a heavier burden that it once was. They would like to sell the desert home and reinvest the proceeds, but in today's real estate market the property has lost 20% of its value. Six months ago it was worth $500,000. Today it is worth $400,000. Even though they bought it for $100,000 and would make a $300,000 profit, the devaluation keeps them from putting it on the market.
They discussed their problem with the Director of Development and Planned Giving at their favorite charity. He suggested a way they could recover some or all of the lost value. A charitable remainder trust. He said that the tax advantages and substantial life-time income may offset the devaluation of the desert home.
A charitable remainder trust is both a lifetime source of income and a way to make a major gift to charity. It bypasses 100% of the capital gain from the sale of the property and also provides a significant charitable tax deduction. Both of these could save the Donors thousands of dollars in taxes.
If John and Mary sell the house for $400,000 and reinvest the proceeds, after paying the sales costs (8% or $32,000) and capital gains taxes (24% CA state and federal tax of $72,000), they will have $296,000 left to reinvest. If it earns 7% annually, they will have an income from the proceeds of the sale of the house of $20,720 per year.
But what if they use the desert home to fund a charitable remainder trust? The house is sold for $400,000. The sales costs are the same ($32,000), but there is no capital gains tax to pay. 100% bypassed. So instead of $296,000 for them to reinvest, the trust is funded with $368,000. If the trust earns the same 7%, their annual income from the trust will be $25,760, or $5,040 more than if they just sell the house, or $90,720 more income over the period of their average life expectancy,18 years.
That's not all. Since when John and Mary are both gone, the charitable remainder trust will provide a gift to their favorite charity, they will receive a charitable income tax deduction in the year they fund the trust, saving them approximately $41,000.
Let's add this up: $72,000 capital gains tax savings + $90,720 more income over 18 years + $41,000 charitable tax deduction = $203,720 added value from the charitable remainder trust over selling and reinvesting.
Interested in hearing more about charitable remainder trusts? Call Larry Boles at (909) 392-4320, Hillcrest's Director of Development and Planned Giving.
Benefits For Your Family and Hillcrest
There are several types of plans. Many of these have wonderful benefits for the gift donors, like increased income and generous tax savings. We invite you to meet some of Hillcrest's friends who have discovered how planned giving is a win-win opportunity for them. Just click on the picture and you can view each story.
Steps to Wise Giving
There are several steps to help you make wise and prudent gifts. These pages are here to help you learn how gift planning ideas can be of personal benefit. Let us suggest a few steps that would help you in that process.
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Thanks very much for visiting us! I would be very pleased to help you. Simply click here to email me at your convenience.
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Larry G. Boles
Director of Development and Planned Giving
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Professional Advisors
We also have a complete tax update service for CPAs, attorneys, CLUs, CFPs, ChFCs, trust officers and other professional friends. The GiftLaw services are made available to all advisors as a free service. We also are always available to assist in helping you provide clients with clear and understandable gift illustrations. If you would like assistance with a gift illustration, please contact lboles@livingathillcrest.org.
If you are a professional advisor, you may take the following steps on this site.
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