A charitable bequest can be for a specific dollar amount, a percentage of your estate, or what remains after other bequests are made. Or, your will or trust can specify that your heirs receive lifetime income from your estate, with the remainder going to Pittsburgh Ballet Theatre.

Example:

Susan grew up loving The Nutcracker and started taking her daughter to see it when she was little. Now, Susan, her daughter, and her granddaughter have a special tradition of going to Pittsburgh Ballet Theatre’s production of The Nutcracker every year. To honor this holiday tradition, Susan left one-third of her estate to Pittsburgh Ballet Theatre so they can keep bringing The Nutcracker to life for generations to come!

Benefits To You:

• You have control of your assets during your lifetime.
• You can make modifications to your bequest.
• You enjoy no upper limit on estate tax deductions for your charitable bequest.

Retirement Accounts like IRAs and 401(k)s are ideal for charitable giving purposes because these assets are most heavily taxed. They offer an opportunity to avoid income and estate tax while donating a significant gift.

Example:

Linda is employed with a company that offers a 401(k). After she retires, she will withdraw funds as needed for living expenses and can leave a portion of the remaining balance to Pittsburgh Ballet Theatre upon her passing.

Benefits To You:

• You can avoid income and estate taxes on residual left in your account.
• You can continue to make withdrawals during your lifetime.

Example: 

Sam has a life insurance policy he no longer needs. He learns that if he names Pittsburgh Ballet Theatre as the owner and beneficiary of the policy, he can deduct the cash value of the policy now as well as leave a generous gift to Pittsburgh Ballet Theatre in the future.

Benefits to you:

• You receive the immediate income tax deduction for the cash value of the policy.
• You are able to make a generous gift to Pittsburgh Ballet Theatre without affecting your cash flow.
• By transferring ownership of a life insurance policy to Pittsburgh Ballet Theatre, you are assured that PBT will later receive the death benefit of the policy.

Example:

Tim and Elizabeth have stock worth $75,000 for which they originally paid $35,000.  They learn they can support Pittsburgh Ballet Theatre by donating this stock to a charitable remainder trust. They defer the tax on the $40,000 capital gain and receive an income tax deduction this year for a portion of the amount contributed to the trust. They also receive annual payments for the rest of both their lives. The balance of the trust is donated to the Pittsburgh Ballet Theatre.

Benefits to You

• You receive an immediate income tax deduction for a portion of your contribution to the trust.
• You or your designated beneficiaries receive a predictable, stable income for life or a specified term.
• You defer payment of the capital gains tax on appreciated assets you donate that are sold.

Example:

Paul establishes a lead trust, valued at $500,000, to benefit Pittsburgh Ballet Theatre. The trust will pay PBT an annual distribution of 5% of the trust’s value for 15 years, starting with an initial payment of $25,000. After 15 years, the remainder of the trust passes to Paul’s family.

Benefits to you:

• You transfer assets to a trust that makes fixed payments to Pittsburgh Ballet Theatre for a specified term. When the trust ends, the principal goes to your chosen beneficiaries.
• The portion of the contribution benefitting Pittsburgh Ballet Theatre is eligible for the gift tax charitable deduction, and the gift tax consequences can be reduced based on the structure of the annuity payments and the term of the trust.
• The contributed assets and their appreciation are removed from your taxable estate for estate tax purposes, providing you have an opportunity to leverage your estate tax exemption to shelter assets expected to appreciate.