Legacy Planned Giving
“Love is Shown More in Deeds Than Words” is perhaps the most distinct message spoken by St. Ignatius; we ask that you consider the intention of these words as you seek to establish bequests to the church.
For many, a will and/or trust provides the opportunity to establish a legacy, proclaim your Catholic faith, and demonstrate to future generations the value of stewardship. Your legacy gift will ensure that St. Francis Xavier Parish will continue to be a beacon of hope, a sanctuary for those seeking a closer relationship with Jesus Christ, and the cornerstone of Jesuit tradition in the Phoenix area.
"Give It Twice" Trust
A very good plan for parents who have made lifetime gifts to charity is to combine a benefit to children with a future benefit to charity. This plan is called a "Give It Twice" trust.
A charitable remainder trust may receive the IRA or 401(k) with no payment of income tax. The full value of the IRA or 401(k) may be invested for a term of up to 20 years. Income earned is taxable and that new income is paid to children for the selected term of years. At the end of the selected term, the charity receives the trust principal.
For example, Mary Smith had an $800,000 estate. She lived in a home worth $200,000, had a CD for $200,000 and $400,000 in her IRA. Her IRA was substantial because when her husband Bill passed away, she rolled over his IRA into hers so the combined IRA is now half of her estate.
Mary has two children and decides to transfer the home and CDs to the children in equal shares when she passes away. They each receive $200,000 in value from the home and CDs with no income or estate tax.
After Mary passes away, the $400,000 IRA is transferred into a charitable remainder trust. It receives the IRA proceeds and invests the full $400,000. The trust pays 5%, which is divided between the two children for a term of 20 years. At the end of 20 years, the trust principal plus growth is given to charity.
Mary felt very pleased because she had achieved several goals. First, she had provided both principal and income to her children. This is a very good plan because some children will need a period of time to improve their money management skills. Second, she saved all of the income tax on the IRA. Because the unitrust is tax exempt, it receives the entire IRA tax free. The trust earns income for the children for a term of 20 years and is then transferred tax free to charity.
Because the trust benefits the children with more than $400,000 in income and then is given to charity, it truly may be called a "give it twice" trust.