Guide to Gift Planning at National FFA Foundation

Ways to GiveA GUIDE TO GIFT PLANNING AT NATIONAL FFA FOUNDATION

2 NATIONAL FFA FOUNDATION

By reading through the information provided in this guidebook, you are taking the first step in making a planned gift, which will provide for the long-term sustainability of FFA and the future of agricultural education. Whether you desire to structure your planned gift to provide funding where the need is greatest or to benefit specific programs or scholarships, we have opportunities to make your vision come to life.

National FFA Foundation staff is available to assist you and your advisors in estate and gift planning.

National FFA FoundationOffice of Planned Giving6060 FFA DriveP.O. Box 68960Indianapolis, IN 46268-0960

317-802-4268www.FFA.org/PlannedGiving

If you have already included a gift to the National FFA Foundation in your plans, we ask that you provide a copy of your will or living trust—or only the section that specifically pertains to your bequest —to us at the address above. Your information will be used for long-term organizational planning and confidentially kept on file to guarantee your wishes are appropriately followed and your gift receives proper recognition.

Thank you for your continued support and considerate interest for securing the future of FFA.

PLANNED GIVING 3

Table of Contents

BEQUEST ....................................... 4

CHARITABLE REMAINDER TRUST ... 6

CHARITABLE LEAD TRUST .............. 8

CHARITABLE GIFT ANNUITY..........10

GIFT OF INSURANCE ..................... 12

GIFTS OF REAL ESTATE .................. 14

NEEDYou want to support FFA, but are unable to donate during your lifetime.

SOLUTIONBy designating FFA as a beneficiary in your will or trust, you can retain ownership and use of property during life and still benefit FFA and the future of agricultural education.

DONORBequests are common and can be made by anyone, at any age.

BENEFITSFFAThe property or cash is transferred to FFA when your estate is disbursed.

Tax DeductionThe amount given to FFA is not subject to federal estate tax.

FlexibilityYou retain use and control of the property during life.

Bequest

A gift to the National FFA Foundation made through your will or trust, bequests are the simplest and most

popular form of planned gift.


PLANNED GIVING 5

THE DETAILSYou can leave property to FFA by including a bequest in your will or trust. Property that passes through a beneficiary designation, such as an individual retirement account, can be left by designating FFA as a beneficiary.

Specific Bequest One way to give is by making a bequest of a fixed amount of money or a specific piece of property. Giving this way ensures that you know the precise property to be gifted or the exact amount of your gift.

“I give, devise, and bequeath to the National FFA Foundation, a not-for-profit organization located in Indianapolis, Indiana, the sum of $______ in cash or in-kind (or____ shares of _____ stock) to be used at the discretion of the Board of Trustees of the National FFA Foundation for the general purposes of the National FFA Foundation and its related entities.”

Percentage of Estate Another way to give is by designating a percentage of your estate. By structuring your gift this way, you ensure that the amount of your gift self-adjusts to the size of your estate, with your gift typically being made after any specific provisions have been followed.

“I give, devise, and bequeath to the National FFA Foundation, a not-for-profit organization located in Indianapolis, Indiana, ____ percent (%) of the rest, residue, and remainder of my estate as an unrestricted gift to be used at the sole discretion of the Board of Trustees of the National FFA Foundation for the general purposes of the National FFA Foundation and its related entities.”

NEED You own appreciated property that produces little or no income, which you want to turn into a productive asset, without paying capital gains tax on the sale of the property.

SOLUTIONYou transfer appreciated property, such as stocks or real estate, to a charitable remainder trust, which will sell the property tax free and make payments for your lifetime or a specified term of years.

DONORCharitable Remainder Trusts are ideal for those with cash or appreciated property with a value of at least $100,000 who want to secure a stream of income while bypassing capital gains tax.

BENEFITSBypass Capital GainsThe trust sells property tax free.

Increased IncomeThe trust pays a percentage of its value to the trust beneficiary.

Tax DeductionYou receive a current federal income tax deduction.

Charitable Remainder Trust


Once the trust instrument is drafted, cash or property is transferred to the trust. In accordance with the trust’s terms, the trust makes payments

to one or more beneficiaries, either for the duration of your lifetime or a specified term of years, and then distributes the remainder to FFA.

PLANNED GIVING 7

THE DETAILSYou transfer cash or appreciated property to the charitable remainder trust (CRT). The CRT is a tax-exempt trust that can sell the property without paying capital gains tax.

Duration A CRT can last for thelifetime of one or more beneficiaries or for a specified term of years.

Annuity vs. Unitrust Payout

A charitable remainder annuity trust (CRAT) pays a fixed dollar amount each year. A charitable remainder unitrust (CRUT), however, pays an amount equal to a percentage of the trust value at the beginning of each year.

Taxation of Payouts Most CRT payouts are taxed to the beneficiary as ordinary income and/or capital gain.

Payout Flexibility A Unitrust offers four flexible payout options:

1. A standard CRUT pays a fixed percentage of the trust value.

2. A net income unitrust (NICRUT) pays the lesser of the trust’s net income or the standard amount.

3. A net income with makeup unitrust (NIMCRUT) operates like a NICRUT but can make up distributions.

4. A flip CRUT pays like a NIMCRUT until a certain date or event, then “flips” to pay out like a standard unitrust.

Charitable Lead Trust

Similar to a charitable remainder trust, once the trust instrument is drafted, cash or property is transferred to the trust. In accordance with the trust’s terms, the trust makes payments to FFA for a specified period of time,

then distributes the trust property to a designated beneficiary.


NEEDYou want to provide financial support to FFA for a period of time, then transfer an asset to family.

SOLUTIONYou contribute property to a trust which makes distributions to FFA for a number of years, with the property ultimately being distributed to your family.

DONORCharitable lead trusts appeal to those who want to pass specific property with growth to family at a reduced gift or estate tax cost. This type of gift is ideal for a person with an estate of $3 million or more.

BENEFITSAppreciation to FamilyYou give property to a charitable lead trust and that property, plus growth, passes to your family with no additional tax.

Tax DeductibleYou receive a current federal gift or estate tax deduction for the present value of the payments that go to FFA.

PLANNED GIVING 9

THE DETAILSYou transfer cash or property to the charitable lead trust (CLT). Unlike a CRT, a CLT is a taxable trust. Each year, the CLT will report its income and take a deduction for the amount that it distributes to FFA. Any excess income is taxable.

Duration A CLT can last for the lifetime of one or more beneficiaries or for a specific term of years.

Annuity vs. Unitrust Payout

Each year, a CLT pays either a fixed annuity amount or a percentage unitrust amount to FFA. A charitable lead annuity trust (CLAT), pays a fixed amount to FFA each year. A charitable lead unitrust (CLUT) pays a different amount each year to FFA; this amount is equal to a fixed percentage of the trust value at the beginning of the year in which the payment was made.

Lead Trust Types A family CLT receives property and usually distributes it to the beneficiary at the end of the term. A gift tax deduction is available, if you create a family CLT.

Another typical lead trust is a grantor CLT. A Grantor CLT receives property that ultimately returns to you. You will also potentially be eligible for an income tax deduction when the trust is created; however, you have to report trust income on your personal income tax return each year.

Charitable Gift Annuities

A Charitable Gift Annuity (CGA) is a contractual agreement through which you make a gift of cash or property to FFA in return

for fixed payments for one or two individuals.


NEEDYou want to make a gift to FFA and receive a stream of fixed income for the future.

SOLUTIONYou and FFA enter into a charitable gift annuity agreement.

DONORFor anyone who desires fixed payments for life, a CGA is beneficial for those who have cash or appreciated property that may produce little or no income.

BENEFITSFixed Payments for LifeA stream of fixed payments to one or two individuals for life.

Tax-free PaymentsA portion of each payment may be tax-free.

Rates by AgePayout rates are based on the annuitant’s age, with older annuitants typically receiving a higher payout.

Tax DeductionYou receive a federal income tax deduction by donating this way.

PLANNED GIVING 11

THE DETAILSA charitable gift annuity is a contract between you and FFA. In exchange for your gift of cash or property, FFA will make fixed payments to you and/or another designated beneficiary for life.

Duration You give cash or appreciated property to FFA. In exchange, FFA makes fixed payments for life to you and/or another individual.

Payout Rate Gift annuity payments are based on a rate schedule set by the American Council on Gift Annuities. Under these rates, the older the age of the person receiving the gift annuity payments, the higher the rate.

Taxation of Payments

A predetermined portion of each gift annuity payment is tax-free, and the remaining amount of each payment is taxable at either capital gain or ordinary income tax rates.

Timing A gift annuity contract can begin making payments immediately (current gift annuity) or defer payments for at least one year (deferred gift annuity).

Gifts of Insurance


NEEDYou have a life insurance policy which is no longer needed for its original purpose. There are a number of ways to put your policy to use to support FFA members.

SOLUTIONMaking an outright gift of a life insurance policy is easy. Contact your insurance company and complete the proper change of ownership form, designating FFA as the new owner.

DONORGifts of life insurance are popular among people who have whole life insurance policies they no longer need.

BENEFITSMaking a gift of life insurance can potentially qualify you for a current charitable income tax deduction. If the policy you donate has premium payments remaining, you can continue to pay them directly to FFA for additional deductions.

Life insurance gifts can be made easily and by almost anyone. These gifts can be structured to be made either during life or at the time of death.

PLANNED GIVING 13

THE DETAILSIn addition to an outright gift of insurance, a variety of giving plans are available to suit your needs.

Bequest of Insurance You may wish to maintain ownership of your policy as a financial safety net. By designating FFA as the beneficiary of the policy, you can retain full control with FFA receiving the proceeds after your lifetime. The beneficiary designation is usually made by completing a simple form provided by your insurance company. The gift can be deducted for estate tax purposes but will not qualify you for an income tax deduction.

Insurance Unitrust If you do not want to give your policy outright, but instead desire life income, another option is to transfer your policy to fund a charitable remainder unitrust (CRUT). The CRUT will provide you with a current income stream for your lifetime or for a term of years and potentially qualify you for a charitable income tax deduction in the year the trust is established. FFA benefits from the future remaining trust value.

Gifts of Real Estate

If you have property you or your family no longer wants, consider transferring ownership to FFA. Doing so can directly benefit

FFA members while also qualifying you for a substantial tax deduction.


Bequest Through Your Will or Trust

NEEDYou would like to give your farm to FFA to support agricultural education and receive an estate tax deduction.

SOLUTIONBy including a gift of real estate in your will or trust, you can wait to transfer title until after your lifetime.

DONORDonors who may not have family members who want or need use of the land and who may benefit from an estate tax deduction.

BENEFITSFlexibilityYou retain the right to control the property during your lifetime.

Tax DeductionThe value of the property is not subject to federal estate tax.

Outright Gift

NEEDYou own land you do not wish to continue to maintain and would like a current tax benefit.

SOLUTIONBy transferring full title to FFA, you can witness your farm being put to use in direct support of FFA members and programs.

DONORAnyone who does not have a present need for real estate they own but who desires a current income tax deduction.

BENEFITSBypass GainBy transferring ownership to FFA rather than selling your unwanted land, you bypass capital gains tax.

Tax DeductionYour gift of real estate can qualify you for a current income tax deduction.

PLANNED GIVING 15

Gift of a Remainder Interest with a Retained Life Estate

NEEDYou want to leave your farm to FFA, but still need use of the land; however, you also want a current income tax deduction.

SOLUTIONYou can deed a remainder interest in your farm to FFA while retaining a life estate in the property, thereby entitling you to continued use for your lifetime.

DONORDonors who want to remain in possession of their land, but desire a current income tax deduction.

BENEFITSTax DeductionYou receive a current federal income tax deduction for the present value of the remainder interest in the property.

Preserves Lifetime UseYou are able to use and control the property during your life.

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For more information on how you can help support FFA through planned giving, call the National FFA Foundation Office of Planned Giving

at 317-802-4268 or visit www.FFA.org/PlannedGiving.

Judge each day not by the harvest you reap but by the seeds you plant.

- attributed to Robert Louis Stevenson

The FFA Mission: FFA makes a positive difference in the lives of students by developing their potential for premier leadership, personal growth and career success through agricultural education.The Agricultural Education Mission: Agricultural education prepares students for successful careers and a lifetime of informed choices in global agriculture, food, fiber and natural resources systems.The National FFA Organization affirms its belief in the value of all human beings and seeks diversity in its membership, leadership and staff as an equal opportunity employer. The National FFA Organization is a resource and support organization that does not select, control, or supervise state association, local chapter or individual member activities. Educational materials are developed by FFA in cooperation with the U.S. Department of Education as a service to state and local agricultural education agencies.© 2014 National FFA Organization

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Guide to Gift Planning at National FFA Foundation