American Philatelic Society

Scott English,
Executive Director

Planned Giving

Bequests, gifts of securities and life insurance are relatively simply planned giving opportunities. Trusts and are more complex usually requiring professional legal assistance and typically only appropriate for commitments of $100,000 or more. To minimize risk the APS/APRL may rely on third party providers to administer annuities or pooled income funds which require minimum investments of $10,000.


The most common and simplest form of planned giving, a bequest is a gift made through your Will or Codicil that will take effect when your estate is settled. A bequest to the APS or APRL can be written into your Will or added to an existing Will by amending it through a Codicil.

A bequest removes assets from the taxable estate and thus may place the taxable estate in a lower tax bracket. Unfortunately you receive no tax benefits during your life nor any immediate satisfaction of supporting the APS or APRL.

Bequests can take several forms:

Percentage Bequest - allocating a fixed percent of your estate;
“I give, devise, and bequeath to the American Philatelic Society, a non-profit organization located at 100 Match Factory Place, Bellefonte, Pennsylvania 16823, ______ percent of my estate, both real and personal property of whatever kind and whatsoever situated.

Residual Bequest - which grants the residue, or portion of the residue, of your estate to the APS after explicit bequests have been made;
“I give, devise, and bequeath to the organization and address, all (or ___%) of the rest, residue, and remainder of my estate, both real and personal property of whatever kind and whatsoever situated.

Specific or Explicit Bequest - for a stated dollar amount or securities;
I give devise and bequeath to ______, the sum of _____ dollars (or describe the specific property or security you intend to bequeath).”

Contingent Bequest - in case one or more of your bequests cannot be fulfilled;
“If any of the above-named beneficiaries should predecease me, I hereby bequeath his/her share of my estate to _________.

Giving Securities

Why would someone give securities rather than simply write a check? Our nation’s tax laws offer special incentives for gifts of non-cash property — especially when it has increased in value since it was acquired.

If you have owned securities for at least a year and a day, you may deduct the current fair market value of securities given to the APS or APRL and at the same time avoid capital gains taxes. By using appreciated securities to do some of your giving, you can conserve cash for other uses.

Additionally, if you are an employee with stock options, it may be possible for you to use your options as a convenient, cashless method of making a charitable gift.

Life Insurance

When planning your gifts it is wise to consider all your assets. Life insurance, as one form of property, may add flexibility to your financial planning. Ask yourself the following questions:

  • Do you have a policy you purchased to provide security for a spouse who no longer needs it or to protect a child who is now grown and a financially independent adult?
  • Do you have a policy to protect a business that no longer exists or no longer needs such protection?
  • Do you have a policy you bought as added security for retirement? Do personal savings, an Individual Retirement Account (IRA), or other assets now provide the security you originally sought when purchasing the life insurance?
  • Do you have life insurance to pay a mortgage that is already paid in full?
  • Do you have a policy you bought for your children’s education which has already been paid in full?
  • Do you have a small policy your parents purchased when you were a child?

If you answered yes to any of the above questions you may wish to consider how your life insurance may be used to help you meet other goals.

There are many ways you may give life insurance to the APS or APRL. You can name us as a beneficiary for a fully or partially paid up policy. The APS/APRL does not have to be the primary beneficiary to receive all the policy proceeds. We could be named as a primary beneficiary for just a portion of the proceeds or listed as a secondary, final, or remainder beneficiary.

Depending on the options selected you may receive an income tax charitable deduction for the policy’s cash value and or premium payments made, and all or a portion of the value of your policy may escape estate taxation.

Life insurance policies may also be used to fund charitable remainder trusts separately described in the following section.

Charitable Remainder Trusts

Two basic types of charitable remainder trusts qualify for federal tax benefits. In both arrangements, a donor gives stock, cash, or other assets such as real estate to a trust. Those assets are invested, producing income for the donor — or another beneficiary — either for a fixed period of time or until the donor dies.

Donors can get income tax deductions for the estimated portion of the assets that will ultimately go to charity. Making such gifts also avoids capital gains taxes. Many donors find the trusts an appealing way to prepare for retirement. The assets can be invested to earn a lower rate of return when the donor is younger and then shifted to earn a higher rate of return.

Unitrusts: Under a basic unitrust, the donor receives one or more yearly payments equaling a fixed percentage of the value of the asset which is assessed each year. Under a net income unitrust, the donor receives only the income earned by the trust, even if the trust earns less than the payout rate. However, the trust can be set up to include a “make-up provision,” which allows donors to make up the lost income, provided the trust earns more than the payout rate in future years.

Annuity Trusts: The donor receives a yearly fixed payment equal to at least five percent of the value of the asset at the time the deferred-giving agreement was signed.

Charitable Lead Trusts

In a charitable lead trust a charity receives the income from your asset’s for a specified time, after which the asset is transferred back to the donor or to the donor’s heirs.

Charitable lead trusts are most appealing to wealthy donors who want to pass appreciated assets to their heirs without paying a substantial amount in taxes. You pay a gift tax when the asset(s) are placed into the trust. After that the asset can grow tax-free. At the end of a specified period, the asset is returned to the donor’s heir or heirs, who do not have to pay any additional taxes.

Gift Annuities

Gift annuities are attractive if you want to receive income from assets that have risen sharply in value, such as stocks. In return for gifts of such assets, you receive a fixed annual income for the rest of your life and avoid capital gains tax. If preferred, the annual payments will not start immediately but will begin at a specified later date such as retirement. You also get an income tax break on a portion of the earnings from an annuity based on your age.

Pooled Income Funds

Obtaining a “unit” in a pooled-income fund is similar to buying a share of a mutual fund. You give cash, securities, or other assets to a non-profit organization, which then invests those assets. You receive income from the fund proportionate to the value of your contribution, as well as an income tax deduction based on the estimated principal that will be left to the charity.

Like gift annuities, pooled-income funds appeal to donors who want to earn income on stock and other assets and escape capital-gains taxes. Unlike the annuities, a donor’s income from a pooled-income fund is tied to fluctuating interest rates. In the long run donors may receive larger earnings than they do from annuities, but they may also do poorer in the short term. As a result, pooled income funds tend to appeal to younger people who are often more willing to take risks with their investments.

Retained Life Estate

You may make a gift of your house to charity and retain the right to live in the house for the remainder of you (and your spouse’s) life. You receive an immediate income tax deduction for the gift and upon your death(s) the house goes to the charity.

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