Legacy gifts are designed to unite your philanthropic and financial goals with the essential needs of our four state museums in Santa Fe, seven historic sites statewide and the Office of Archaeological Studies.
Designating a planned gift through the Museum of New Mexico Foundation enables you to impact exhibitions, collections, education, and other programs and projects at your favorite cultural institution beyond your lifetime. Your gifts preserve and build upon what you treasure today for future generations, and are central to the continued excellence and success of our cultural partners.
When you opt to support our cultural partners in this meaningful way, you become part of the Foundation’s Legacy Society, a community of donors who understand the vital impact of legacy giving in enhancing the lives of our cultural spaces and places.
There are various types of legacy gifts, including a bequest of cash or part of an estate, stocks, individual retirement accounts, gift annuities, real estate and life insurance. The Foundation will work with you and your financial advisor to create a giving plan that best suits your financial, professional and personal needs.
Following is an overview of some of the many ways that you can leave a legacy today, and of the benefits you receive in return for your generosity.
Gifts of Stock
IRA Charitable Rollover
Gifts of Retirement Account Assets
Charitable Remainder Trust
Gifts of Real Estate
Gifts of Life Insurance
A popular, flexible and enduring planned gift is a simple bequest made through your will. Bequests allow you to retain full use of your assets during your lifetime with no disruption of your lifestyle and no immediate out-of- pocket costs. You can change your bequest whenever you choose, giving you complete control of the planning process.
To make a bequest, designate that cash or part of your estate passes directly to your chosen cultural institution to be used for a specific purpose or as an unrestricted gift. Your bequest can take many forms, including:
- A specific asset
- A specific sum of money
- A percentage of your estate
- The remainder of your estate after you have provided for other beneficiaries
A gift annuity is an agreement between you and the Foundation. This provides you, or a loved one, a fixed annual payment during your lifetime (or the life of your beneficiary). The payment amount is based on the gift amount and age of the annuitant(s) at the time of the gift.
A gift annuity can be established with a modest contribution and may be funded with cash or marketable securities. In return, you receive these attractive benefits:
- An immediate income tax deduction (subject to certain income limitations)
- An option to spread out any capital gains tax liability
- An option to make part of your annuity payment tax-free for a certain number of years. You select the payment intervals (usually quarterly) and name one or two annuitants.
Professionals and other highly compensated employees who “max out” their annual retirement plan contributions due to restrictive rules and regulations may wish to consider a deferred gift annuity strategy. Deferred gift annuities offer these important benefits:
- Use of the annuity to supplement qualified retirement plan savings
- An option to receive an income tax deduction now during high-income years
- An option to postpone the start of annuity payments, usually after retirement
Gifts of long-term, highly appreciated securities are the most common type of property gift. While gifts of individual stock are typical, bonds or mutual fund shares are also attractive gift options. Outright securities gifts can be made quickly and offer desirable tax benefits, including:
- For appreciated property held long term, the full fair market value of securities gifts is generally deductible. For example, if you give shares of stock currently valued at $10,000, you may deduct the full amount on your income tax return (subject to certain income limitations) even though you may have bought the stock for $1,000.
- A charitable gift of securities is not considered a sale and does not generate any capital gains tax.
Recent federal legislation permanently extended the popular gift option known as the IRA Charitable Rollover. This means that IRA owners age 70½ and over can use the IRA required minimum distribution (RMD) to make an easy and meaningful gift. Your gift can make an immediate impact in this way:
- Instruct your IRA custodian to make a distribution directly to the Museum of New Mexico Foundation.
- Exclude the distribution from your income for federal tax purposes. There is no tax deduction, and no tax is due!
- Qualify up to $100,000 of your gift for this favorable tax treatment.
More donors are choosing to use qualified retirement account assets in their charitable gift planning. The reason: retirement account assets left to loved ones may be subject to higher taxation than other types of assets. By making a gift in this way, you may:
- Reduce taxes that otherwise would be imposed on those assets
- Leave more to your intended beneficiaries by giving other assets
A gift of a charitable remainder trust retains the right to income for you and/or your beneficiaries for life, or a period of up to 20 years. This gift option also offers the following desirable benefits:
- An immediate and substantial charitable tax deduction (subject to certain income limitations)
- Potential avoidance of current capital gains taxes when the trust is funded with long-term appreciated property
- Reduction of your estate to avoid or reduce death taxes
- Substantial reduction of probate costs, taxes and other estate transfer expenses
A gift to a charitable remainder trust generates an immediate income tax deduction, even though income is to be paid to the donor (and/or other beneficiaries) for life, or up to 20 years. The exact amount of the deduction depends on the:
- Value of the property transferred to the trust
- Amount of income benefits that are payable each year to individual beneficiaries
- Approximate length of time the income benefits will be paid
- Interest rates at the time the gift is made
Despite the tax and financial benefits of a charitable remainder trust, you should consider this kind of arrangement only if you and your advisors determine it is compatible with your overall estate, tax and financial plan.
Gifts of appreciated real estate enable you to avoid capital gains taxes while deducting the full fair market value of the property as a charitable contribution. Examples include:
Gift of a Remainder Interest in a Personal Residence or Farm
A special provision of the tax law allows an immediate tax deduction for a gift of a remainder interest in your home or farm. The gift is deductible in the year of the transfer (subject to certain income limitations) and allows for these additional benefits:
- You retain an absolute right to occupy the home or farm for your life (or the life of a family member).
- The property passes to the Museum of New Mexico Foundation only after termination of the life estate(s).
The charitable deduction allowable for this future gift is the present value of the Foundation’s right to receive the property at some later date. The age of the life tenant is the primary factor in determining the present value of the Foundation’s deferred interest and the charitable deduction.
Gift of a Fractional Interest in Real Estate
Donors may also take a charitable deduction for gifts of fractional interests in real estate. This type of gift is especially rewarding when you own a vacation home that you use only part of the year. For example, if Mary and Jim own a $300,000 vacation home that they use for only two months of the year, and they give the Museum of New Mexico Foundation a 50% interest in the property, they receive these benefits:
- Secure a tax deduction for the value of the Foundation’s interest in the property
- Retain the right to use and occupy the property for up to half the year
Life insurance is also an excellent and simple giving tool that accomplishes your philanthropic goals while realizing other important financial objectives.
For example: Jim owns a $100,000 life insurance policy with a cash value of $40,000. No further premiums are due and he no longer needs the coverage. Jim may designate the Foundation as the beneficiary of the policy, ensuring that the Foundation receives $100,000 when Jim dies. Or he can transfer ownership of the policy to the Foundation now. In return, Jim receives:
- A charitable deduction equal to the lesser of his cost basis or the policy’s replacement value