LegacyChange Plan - How It Works

FEC LegacyChangePlans

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Asset Transfer - Non-Tax Burden - Gifting Legacy - Keep Planning Private

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Your LegacyChangePlan

How It Works

Assisting to Preserve and Maintain Client Wealth

LegacyPlan Basics

Grace or charitable bargain sale with installment contract (reinsured).

LegacyPlan acquires asset (by option contract)

LegacyPlan divests (sells) with non-profit tax advantages.

LegacyPlan pays seller with an insured installment contract.

Split interest transaction (multiple interest beneficiaries for non-profit)

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LegacyChange (LC) has the expertise and administrative capabilities to assist charities and non-profits in two ways:

Receiving Non-Cash Donations – LC facilitates the donation of assets such as real estate, securities, annuities and life insurance. LC manages the entire process, from acquisition and receipt of the asset to the final granting of proceeds to the referring charity.

Planned Giving Programs – LC can also facilitate the transfer of non-cash assets to fund planned giving programs on behalf of other non-profits. LC will structure as well as administer planned giving programs in order to create income payouts for donors and their families.

LegacyChange Plans include immediate and deferred charitable gift annuities (CGAs) and charitable bargain sales with installment contract payouts (CBICs), as well as simple charitable remainder annuity trusts (CRATs). LCP secures the reinsurance contracts to back the obligation

Utilizing your Indexed, Fixed, or Variable Annuity for a LegacyPlan will allow you to achieve a number of objectives.

Avoid passing taxes on accrued gains to heirs.
Create an immediate income tax deduction.
Generate income for yourself and/or a structured inheritance for heirs.
Support your favorite charity or non-profit organization.

Here’s how it works for annuities, securities and various assets:

Transfer ownership of your current annuity to LegacyChange (LC) Plan by completing a simple change of ownership form.

A LC absorbs surrender penalties, if any, and issues a new LegacyChange Plan at the full accumulation value.

Receive immediate or deferred income payments for life or specified number of years. The income stream can be directed to you, your spouse, your heirs or your favorite charity.

A tax deduction is created. This deduction can be applied to your tax return to offset gains and may also be used to lower your taxable income reported to the IRS for the first year, with 5 years of carry-forward, if applicable.

A LC supports charitable works with a portion of the proceeds from the transaction.

Here’s how it works for real estate:

We complete a brief preliminary illustration with owner detail. More illustrations may be done as one has more detail.

As mentioned, to access full value of tax advantages the Legacy Plan moves through LegacyChange (LC) before the sale.

One signs an option for LegacyChange (LC) to sell the property.

One may cancel the option any time that cancels the property sale before accepting an offer. LC wishes for the owner to be happy with the deal.

LC hires a local real estate broker to market property. LC has experienced staff and real estate officer to assist. One may recommend a broker.

An experienced real estate broker does a windshield appraisal to assist price decision for the owner-seller’s information.

A real estate broker is assigned or one may have own buyer.

The owner-seller sets a lowest price and can accept a price as preferred.

Seller may accept offer or not.

If and when offer accepted, the LegacyPlan has closing.

A tax deduction is created. This deduction can be applied to your tax return to offset gains and may also be used to lower your taxable income reported to the IRS for the first year, with 5 years of carry-forward, if applicable.

When the sale is contracted or when preferred, a general appraisal (required by IRS) is completed within 60 days before or 60 days after the sale.

Client and client CPA receive detail of plan and tax information.

Client’s charity receives gift $.

Client receives or defers income.

LegacyChange Plans (LCP) offer simplified charitable planned giving programs that we call "LegacyPlans", which enable families and individuals to reposition assets that they already own, such as securities, real estate and existing annuities, in order to create new benefits for themselves and their heirs. These include generating an income tax deduction, reducing capital gains taxes and estate taxes, creating an income stream for themselves or their heirs, while supporting their favorite charitable causes.

By working through a 501 (c)(3) non-profit organizations, ordinary families are able to benefit from provisions in the tax code that many thought were only available to very wealthy individuals. The chart below summarizes the features and benefits of LTF’s two most popular LegacyPlans.

	CGA LegacyPlan * (Charitable Gift Annuity)	CBIC LegacyPlan** (Charitable Bargain Sale with Installment Contract)
Description	Provides tax-favored, lifetime fixed income for one or two individuals	Provides tax-favored, fixed installment payments for a specified number of years Term of years payout to client and/or beneficiaries
Payout Options	Immediate or Deferred Flexible Deferred (payments can begin anytime after 1 year)	Immediate or Deferred Flexible Deferred (payments can begin anytime after 1 year)
Income Tax Deduction	Immediate tax deduction for current year with 5 year carry forward, if needed	Immediate tax deduction for current year with 5 year carry forward, if needed
Capital Gain Reduction	A portion of the gain is eliminated Remainder amortized over life of income stream	A portion of the gain is eliminated Remainder amortized over life of income stream***
Taxable Estate Reduction	Asset is removed from estate (one life or married couple) If 2nd annuitant is not spouse, asset is partially removed from the estate	Gift portion of asset is removed from estate Only present value of future income payments is included in estate

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All diagrams and detail therein are scenarios to be updated and adjusted to each plan's individual requirement. This is educational information and is not intended to be legal or tax advice. Individuals should seek tax, legal or financial advice from an independent professional advisor.

*IRC §501(m)(5)

**IRC §453 and 26 CFR §1.1011-2

*** When transferring publicly traded securities, remainder of gain must be recognized in year of sale. Both products are not available in all states. Not FDIC insured or insured by any federal or state government agency.