Estate Planning and Annuities

You can support Herzog Hospital while furthering your own financial objectives:

• Enjoy an immediate income tax deduction for a ‘future’ gift. 

• Bypass capital gains taxes.

• Establish a memorial for a loved one.

• Leave your children a greater inheritance.

Herzog Worldwide Fund
A pooled Income Fund is conceptually like a mutual fund with charitable income tax and estate tax benefits. The donor and/or beneficiaries receive an income stream based on the investment performance of the pooled income fund. For this purpose, Herzog Hospital is in the process of developing the Herzog Worldwide Fund. Cash or appreciated securities can be contributed to the Herzog Worldwide Fund with an initial contribution minimum of $10,000.




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Charitable Remainder Trusts

A Charitable Remainder Trust (CRT) is a way to make a significant deferred gift while retaining lifetime benefits. A CRT can be established to provide an income for you, your spouse, your children or other beneficiaries before passing to Herzog Hospital. At the same time, you will create a charitable income tax deduction which can be used to offset income and, if necessary, carried forward for an additional five years. The assets contributed to a charitable remainder trust would be removed from your estate thus avoiding the Federal Estate Tax on those assets, which can be as much as 55% of their value. There are two types of charitable remainder trusts. The Charitable Remainder Annuity Trust provides the donor and/or beneficiaries with a fixed lifetime income. The payment could continue for the lifetime of the beneficiaries or for up to 20 years. The Annuity Trust is best for donors who seek a regular fixed income and prefer to have the satisfaction of knowing the amount of the payment in advance. The Charitable Remainder Unitrust provides the donor and/or beneficiaries with an annual income based on a fixed payment percentage (not less than 5%) of the value of the trust’s assets as determined annually. Again, the payment can continue for the lifetime of the beneficiaries or for up to 20 years. As the trust’s assets increase in value, the donor receives a larger payment, providing a hedge against inflation. Additional contributions are permitted to a Unitrust.




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Charitable Lead Trusts

A Charitable Lead Trust is a vehicle that is used when the donor wishes to allow Herzog Hospital receive a cashflow from the trust for a fixed number of years, after which the trust terminates and the assets distributed tot he donor or other beneficiaries. A Charitable Lead Trust can be used to leverage gift tax to ‘freeze’ the value of assets to the intended beneficiaries.

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Charitable Gift Annuities

A Charitable Gift Annuity is usually established with a gift of $10,000 or more. The initial gift can consist of cash or securities. Capital gains tax is avoided on the transfer of appreciated securities to purchase a Charitable gift Annuity. The donor also receives a current income tax deduction and removes the assets from his/her estate for Federal Estate Tax purposes. There are two types of Charitable Gift Annuities. Immediate Charitable Gift Annuity is a contract between the donor and Herzog Hospital that pays a fixed income for life to one or more beneficiaries. The Deferred Charitable Gift Annuity is a contract between the donor and Herzog Hospital that provides for income payments be begin at some time in the future (at least one year after the date of the gift).




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Remainder Interest In Real Estate

An individual can deed his/her real estate to Herzog Hospital currently, but continue to have full and exclusive use of the property for the remainder of his/her lifetime. The donor continues to pay for maintenance, real estate taxes and insurance on the property just as they always have. The donor receives a charitable income tax deduction in the year that the deed is recorded.

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Gifts Using Life Insurance

The gift of a paid-up life insurance policy to Herzog Hospital will usually create a charitable income tax deduction equal to the replacement value of the policy or its cost basis, whichever is less. Therefore, term insurance could not be used as a gift to create an income tax deduction. Herzog Hospital could also be named as the beneficiary of existing life insurance (permanent or term), thereby avoiding possible estate tax inclusion of the policy proceeds.




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Wills And Testamentary Trusts

It is possible to name Herzog Hospital as a beneficiary in your Will or of a Trust created by your Will. Testamentary bequests are among the most popular planned gifts. You may bequeath a specific item or a percentage of your estate to Herzog Hospital. It can be an outright bequest or a contingent one; that is, going to Herzog Hospital only if another beneficiary predeceases you. Further, if you wish, the bequest may be restricted for a particular purpose.

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Retirement Plan Beneficiary Designations



Herzog Hospital can be named as a beneficiary of a IRA, 401(k) or other qualified retirement plan. The assets in these plans are taxed for both income tax and estate tax purposes and can even be subject to an additional excise tax at the account owner’s death. All of these taxes, which can amount to 75% of the account’s value, can be avoided on the portion of the account for which Herzog Hospital has been designated as the beneficiary.



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Family Foundations And Supporting Organizations


A donor can establish their own family foundation and make Herzog Hospital one of its intended charities. The family foundation is an independent entity which has tax exempt status subject to certain IRS rules. A family foundation can continue in perpetuity. A supporting organization is similar to a family foundation but it derives its tax exempt status from the organization that it is designated to support. Herzog Hospital can act as the underlying charity for a supporting organization. Contributions to a family foundation and a supporting organization are governed by slightly different rules but contributions to either usually create a current income tax deduction. The assets contributed are also removed from the donor’s estate for Federal Estate purposes.

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