Gifts to benefit the Maui Arts & Cultural Center now:
Charitable lead trusts are an attractive method that allows you to leave property to your heirs, reduce gift and estate tax costs, and provide income to MACC. To create a charitable lead trust, you contribute assets to a trust and set an amount or a fixed percentage, which is then paid to MACC for a designated period of time. At the end of this time period, the trust is dissolved and the property is either returned to you or distributed to named beneficiaries, thereby removing these assets from your estate.
Gifts of tangible personal property that are useful to MACC, including real estate, can offer an immediate tax deduction and, if qualified as a long-term capital asset (held for a year and a day), offer avoidance of capital gains tax, removal of the asset from your estate, and, if appropriate, elimination of maintenance costs of the property. Valuation for income tax purposes may require that you obtain an independent appraisal. The deduction is limited to 30% of adjusted gross income. Excess beyond 30% can be carried forward for five additional years.
You can liquidate a life insurance policy no longer needed for family protection and give the proceeds to MACC. This will give you an immediate tax deduction as well as reduce your estate and inheritance taxes by distributing part of your net worth during your lifetime.
Gifts to benefit the Maui Arts & Cultural Center in the future:
You may make a bequest to MACC by preparing a new will or adding a codicil amending an existing one. A bequest is not subject to federal or state estate or inheritance taxes and is, in fact, deductible in calculating the taxable estate. There is no limit to the amount of that deduction. The following language is appropriate for making an unrestricted bequest: “I give (the sum of ____ dollars), (all or _____percent of the residuary of my estate), to the Maui Arts & Cultural Center, Kahului, Hawaii, for its general corporate purposes.”
Charitable remainder trusts enable you to contribute to the future of MACC, retain lifetime annual payments, and generate significant tax benefits. You make an irrevocable gift to MACC and set an amount or fixed percentage that is then paid to you, providing life income for yourself and a survivor. For an annuity trust , the amount is set when the trust is created, either as a fixed percentage or a set dollar amount of the then fair market value of the trust assets. For a unitrust , the amount is a fixed percentage of the fair market value of the trust assets as determined annually.
You can name MACC as a beneficiary of all or part of the proceeds from a life insurance policy. Or, you can give a paid-up policy, a new policy, or a policy on which you are still paying naming MACC as sole owner and beneficiary and take a deduction for the “present value” of the policy (approximately the cash surrender value or the cost basis, whichever is less). In these instances, you diminish your estate and inheritance taxes by distributing part of your net worth during your lifetime.
If you continue to pay the premiums to maintain the life insurance policy, you will also be able to deduct the premium payments as charitable contributions.
You can also use life insurance as a “replacement” asset. You give appreciated property to MACC either outright or to fund a life income arrangement, then replace the dollar value of the property with life insurance for your family. The tax saving from your gift is often sufficient to cover the cost of the replacement insurance. And the insurance proceeds can be paid outside of your estate.
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