Planned Giving at Rhode Island Hospital

Bequest Benefits

A bequest is generally a revocable gift, which means it can be changed or modified at any time. You can choose to designate that a bequest be used for a general or specific purpose so you have the peace of mind knowing that your gift will be used as intended. Bequests are exempt from federal estate taxes. If you have a taxable estate, the estate tax charitable deduction may offset or eliminate estate taxes, resulting in a larger inheritance for your heirs.

Types of Bequests

Specific Bequest. A specific bequest involves making a gift of a specific asset or dollar amount.

Percentage Bequest. A percentage bequest involves leaving a specific percentage of your overall estate to charity.

Residual Bequest. A residual bequest is made from the balance of an estate after the will or trust has given away each of the specific bequests. A common residual bequest involves leaving a percentage of the residue of the estate to charity.

Contingent Bequest. A contingent bequest is made to charity only if the purpose of the primary bequest cannot be met. For example, you could leave a specific percentage of your estate to a relative, but the bequest language could provide that if the relative is not alive at the time of your death, the percentage will go to the Rhode Island Hospital Foundation.

Bequest Language

In order to make a bequest, you should speak with your attorney. We have provided some basic bequest language to assist you and your attorney.

1. Bequest of a Specific Dollar Amount

I hereby give, devise and bequeath _________ and No/100 dollars ($DOLLARS) to Rhode Island Hospital Foundation located in Providence, RI, income and principal to be applied in its discretion for its general uses and purposes.

2. Percentage Bequest

I hereby give, devise and bequeath ____ percent (___%) of my total estate, determined as of the date of my death, to Rhode Island Hospital Foundation located in Providence, RI, income and principal to be applied in its discretion for its general uses and purposes.

3. Residual Bequest

I hereby give, devise and bequeath to Rhode Island Hospital Foundation located in Providence, RI, ALL OR A PERCENTAGE of the rest, residue and remainder of my estate, income and principal to be applied in its discretion for its general uses and purposes.

4. Contingent Bequest

If (primary beneficiary) does not survive me, then I hereby give, devise and bequeath to Rhode Island Hospital Foundation located in Providence, RI, DESCRIPTION OF PROPERTY, income and principal to be applied in its discretion for its general uses and purposes.

Restricted Bequests

If you are considering a bequest but would like to ensure that your bequest will be used for a specific purpose, please let us know. We would be happy to work with you and your attorney to help you identify ways to give and meet your charitable objectives. We will also work with you and your attorney to craft language to accomplish your goals.

If you are making a restricted bequest, we recommend that your attorney include the following provision to give the Rhode Island Hospital Foundation flexibility should it no longer be possible for us to use your gift as you originally intended:

If, in the judgment of the Board of Directors of the Rhode Island Hospital Foundation, it shall become impossible for the Rhode Island Hospital Foundation to use this bequest to accomplish the specific purposes of this bequest, the Rhode Island Hospital Foundation may use the income and principal of this gift for such purpose or purposes as the Board determines is most closely related to the restricted purpose of my bequest.

If You Need Retirement Income Now

Immediate Payment Charitable Gift Annuity

Through a simple contract, you agree to make a donation of cash, stocks, or other assets to Rhode Island Hospital Foundation. In return, you receive a fixed amount each year for the rest of your lifetime while also supporting our caregivers and the community they serve.

Below is an example based upon a donor 67 years of age establishing a $10,000 immediate payment charitable gift annuity with cash.

Benefits

Immediate.  Potential charitable income tax deduction of $3,626.

Annual. Total annual payment of $590 (a 5.9% rate of return) for life of annuitant, $348 of which is tax-free for the first 13 years.

Future. Rhode Island Hospital will receive remaining principal when annuity ends.

If You Don't Need Extra Income Right Now

Deferred Payment Charitable Gift Annuity

You make the contribution to us now, potentially securing a current income tax charitable deduction in the year you make the gift. Starting at least one year after your gift, Rhode Island Hospital Foundation provides you with fixed payments for life. This is especially advantageous if your tax bracket is higher now than it will be later when you retire. The rate depends on your age now and your age when the payments will begin. Because payments are deferred, the rate is considerably higher than with an immediate gift annuity. Your charitable deduction is larger, too, when you choose to defer the start of your payments.

Below is an example based upon a cash gift of $10,000 for a donor 55 years of age who defers the start of their payments for ten years.

Benefits

Immediate. Potential charitable income tax deduction of $3,597.

Annual. Total annual payment of $900 (a 9% rate of return) starting in 2034 for life of annuitant, $283 of which is tax-free for the first 20 years.

Future. Rhode Island Hospital will receive remaining principal when annuity ends.

Both immediate and deferred annuities can be for one or two people, so your spouse or another loved one can also receive payments for life.

If you use appreciated stock to fund your immediate or deferred annuity, you can usually eliminate capital gains tax on a portion of the gift and spread the rest of the gain over your life expectancy.

You can also fund your annuity using your IRA assets. If you are 70½ and older, you can make a one-time election of up to $53,000 to fund a gift annuity. While your gift does not qualify for an income tax deduction, it may avoid income tax liability on the transfer and count toward all or part of your annual required minimum distributions.

Rates are current as of April 2024 and calculations will vary depending on your personal circumstances. To receive your own personalized proposal, please contact Chris Josephson, Senior Philanthropy Officer, at 401-444-6412 or [email protected].

What do life insurance, donor advised funds, and retirement accounts all have in common? They are all assets that you can name the Rhode Island Hospital Foundation as a beneficiary of as part of your estate plans. In most cases you just need to contact your fund administrator and complete a change of beneficiary form. Doing so can be a simpler and less expensive alternative to changing your will or trust.

And when deciding which assets to leave to your heirs and which to leave to charities like the Rhode Island Hospital Foundation, there are potential tax benefits involved in leaving a charity a retirement account and your heirs’ other types of assets. Talk to your financial advisor to learn more today.

Do you own an IRA or other qualified retirement plan? Are you at least 70.5 years old? Are you looking for a way to potentially reduce your tax burden even if you don’t itemize while also supporting our mission? If so, consider making an IRA charitable rollover gift. Just contact your fund administrator today for more information on how to make a gift directly from your IRA to support the Rhode Island Hospital Foundation.

With an IRA charitable rollover, you can:

• Direct up to $100,000
• Satisfy your annual required minimum distribution, or RMD, up to the amount of your gift
• Give from pre-tax assets and your distribution is excluded from taxable income
• Help avoid limits on charitable deductions

Cash

Cash is the easiest of all assets to transfer in order to fund a life income gift to Rhode Island Hospital Foundation. Ordinarily, the receipt of your check by the hospital concludes the transaction with the postmark on your envelope as your official date of gift. A life income gift (such as a charitable gift annuity or a charitable remainder unitrust) is likely to provide higher income than either a certificate of deposit or a savings account.

Securities and Mutual Funds

Many donors who own highly appreciated securities are reluctant to sell because of the capital gains tax on the appreciated portion of the assets. Using securities and/or mutual funds to fund a life income gift is a way to avoid incurring up-front capital gains tax liability.

Real Estate

In reviewing their assets, donors often find that real estate, whether their primary residence or vacation home, has appreciated more than their other assets. A gift of real estate to Rhode Island Hospital Foundation can offer significant benefits to both the donor and the hospital. There are several options for making a real estate gift:

• Outright Gift of Real Estate: A gift to the hospital results in a charitable income tax deduction based on the fair market value of the property at the time of the gift. In addition, the donor is able to avoid any capital gains tax liability.
• Life Income Gifts of Real Estate: A gift of real estate can be structured to provide a life income (usually through a trust or a deferred payment gift annuity). Whatever gift vehicle is chosen, the donor receives a charitable income tax deduction (for a portion of the gift's value) in the year the gift is made.
• Gift of Real Estate with Retained Life Estate: A donor may decide to make a gift of their principal residence or vacation home to the hospital and retain the right to live in the house for their lifetime. The donor receives a charitable income tax deduction for a portion of the fair market value of the home in the year of the gift and retains rights and duties of ownership for life.

Rhode Island Hospital Foundation has suggested guidelines to ensure that real estate gift transfers go smoothly: property should be readily saleable so that the hospital does not incur undue carrying expenses; a qualified appraisal must be provided by the donor to substantiate the value of the property; and the real estate should be mortgage-free.