Forms of Bequest

Thank you for considering making Preble Street part of your personal legacy! Below are examples of suggested forms of bequests — each can be adapted by you and your lawyer and/or financial advisor to meet your specific intentions.

Gifts By Will
Bequests made as part of a will can be customized to incorporate personal intentions, and a bequest to a charity like Preble Street may be exempt from both federal and state estate tax. Below are the three types of bequests:

Specific Bequest
“I give and bequeath to Preble Street, a nonprofit Corporation in Portland, Maine, the sum of $ ___________ to be used for the general purposes of the agency (or to be used for a specific purpose such as endowment).”

Residuary Bequest
“I give and bequeath to Preble Street, a nonprofit Corporation in Portland, Maine, all (or stated percentage of) the rest residue and remainder of my estate to be used for the general purposes of the agency (or to be used for a specific purpose such as endowment).”

Contingent Bequest
A contingent bequest names Preble Street to receive part or all of your estate in the event your designated beneficiaries predecease you. You might insert in your will language such as the following: “If any beneficiary named in this will is not living at my decease, then I give, devise, and bequeath to Preble Street, a nonprofit Corporation in Portland, Maine, any bequest which said beneficiary would have received if he or she had survived me.”

Charitable Gift Annuities
Preble Street offers Charitable Gift Annuities (CGA) to give donors financial security while making a substantial donation.  A transfer of cash or securities to a CGA provides secure fixed payments for life.

  • Immediate CGAs are available to donors once they reach the age of 65, with a minimum gift of $25,000.
  • Deferred CGAs are available to those who are younger than 65, with a minimum gift of $15,000.

Gifts By Trust

Trusts can be established to fulfill a donor’s intent to contribute to a charity.  Trusts can be either revocable or irrevocable. Under the Internal Revenue Code, there are tax advantages to various trusts which donor’s legal, financial and/or tax advisors can assist them in maximizing.

There are two types of irrevocable trusts which could benefit Preble Street:

Charitable Remainder Trust 
A Charitable Remainder Trust provides for irrevocable transfer of assets to an independent trustee who pays income from the trust to its beneficiaries. Upon the death of the last beneficiary, the trust principal goes to the chosen charity. There are two payment options for Charitable Remainder Trusts:

  • A unitrust pays a fluctuating amount to the beneficiary based on a percentage of the fair market value of the trust’s assets.
  • An annuity trust pays a fixed amount annually to the beneficiary based on the fair market value of the trust when it is established.

Charitable Lead Trust 
A Charitable Lead Trust first makes payments to the donor’s choice of charity for a designated period of time, then returns the remaining assets to the donor, the donor’s family, or others the donor designates.

The donor can avoid or reduce potential gift and estate taxes on the trust assets passing to the family by deferring income to charity.

Gifts By Life Insurance
Life insurance policies can be assigned to a charity and may provide a charitable deduction on your current federal tax return.  The amount of the deduction is roughly the cash value of the policy at the time the title to the policy is transferred.  You could also reduce your estate tax assets.  The gift of a life insurance policy to a charity may remove the policy value from your estate and could reduce your federal estate tax.

Retirement Plans and IRAs
Retirement plans and IRAs are typically the largest source of an individual’s assets and generate taxable income when paid. It can be more tax advantageous to leave these types of assets to charity. To name a charity as a beneficiary an individual must complete a beneficiary designation form. Beneficiary forms can be changed at any time.