Planned Giving - Catherine's Legacy

Mercy High School founded “Catherine’s Legacy” in 2002 in order to honor those donors, who have named Mercy High School Burlingame as a beneficiary of their estate plan, for their vision and generosity. The wonderful thing about planned giving is that it can greatly benefit you and your loved ones, while also helping others—in this case, the students at Mercy High School Burlingame. Regardless of income level or age, anyone can have a huge impact on Mercy’s future by establishing a planned gift. We hope you’ll consider including a gift to Mercy High School in your will or living trust.

The official bequest language for Mercy High School is: “I, [name], of [city, state, ZIP], give, devise and bequeath to Mercy High School [written amount or percentage of the estate or description of property] for its unrestricted use and purpose.”

If you would like to join Catherine’s Legacy by making a planned gift to Mercy, please contact Mary Lund, Director of Advancement at mlund@mercyhsb.com or 650.762.1191.

Interested in helping Mercy High School, Burlingame with our mission but feel overwhelmed by the thought of writing another check or giving up your assets today? A simple, flexible and versatile way to ensure we can continue our work for years to come is a gift in your will or living trust, known as a charitable bequest. This is a short statement in your will or living trust that leaves to Mercy High School, Burlingame a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

By including a bequest to Mercy in your will or living trust, you are ensuring that we can continue our mission for years to come.

Sample Bequest Language

I bequeath to Mercy High School, Burlingame  (Tax ID  94-1230999 #53-0196603), a nonprofit organization located in Burlingame CA

• the sum of _________ dollars; or
• an amount equal to ________ percent of the net value of my estate; or
• all the rest, residue, and remainder of my estate

Passionate about supporting Mercy High School, Burlingame with our mission even after your lifetime? It's not only possible, it's easy to do with a beneficiary designation which clearly identifies how specific assets will be distributed after your death. Just name Mercy as a beneficiary to receive assets such as retirement plans and life insurance policies after you're gone. You simply fill out a form that is entirely separate from your will—which makes this approach an easy way to give.

Not only is it an easy way to give, but it's also flexible—you aren't locked into the choices you make today. You can review and adjust beneficiary designations anytime you want.

Did you know?

Most distributions from retirement plans (other than Roth IRAs) are subject to income taxes—and possibly estate taxes—if left to an individual; however, a charity that is named as the beneficiary does not pay income or estate taxes on the distribution due to its tax-exempt status. Therefore, if you name Mercy as a beneficiary of your retirement plan, the full value of what will be distributed to the university can be used to support the purpose that you designate.

You can name Mercy as a beneficiary of your retirement plan on the beneficiary designation form provided by your retirement plan administrator. That form usually asks for the name of the beneficiary (Mercy High School, Burlingame), its address (2750 Adeline Drive, Burlingame CA), and a tax identification number (94-1230999). This will provide an unrestricted gift to Mercy. 

IRA Qualified Charitable Distribution (QCD)
How and Why to Use Your IRA to Make Gifts to Mercy High School
The IRA Qualified Charitable Distribution (formerly known as “charitable rollover”provides an excellent opportunity to make gifts to Mercy without incurring income taxes today or estate tax in the future.

To qualify:

• You must be age 70½ or older on the date of the gift.

• Transfers must be made directly from a traditional or Roth IRA account by your IRA administrator to Mercy High School.

  • Funds that are withdrawn by you and then contributed do not qualify.

  • Gifts from 401k, 403b, SEP and other plans do not qualify.

• Gifts must be outright.

  • Distributions for life-income arrangements such as charitable gift annuities and charitable remainder trusts are not allowed.

  • A QCD can be used to satisfy a pledge or for a donor-designated use.

Benefits

IRA Qualified Charitable Distributions:

• Can total up to $100,000 per year.

  • Each spouse may make an IRA QCD of $100,000 per year from his or her own IRA.

  • Mercy can receive a distribution directly from an IRA in an amount greater than $100,000, but the excess over $100,000 will be treated as a taxable distribution to the donor.  An offsetting charitable deduction for the excess may be available depending on your circumstances.

• Are not included in your adjusted gross income for federal income tax purposes on your IRS Form 1040 (no charitable deduction is available, however).

• Count towards any required minimum distribution for the year from your IRA, if applicable. 

Once your required minimum distributions (RMDs) begin, as you plan for your RMDs for the year, consider using those funds for your annual fund or a capital gift to Mercy using the IRA Qualified Charitable Distribution.

Questions and Answers
The Protecting Americans from Tax Hikes Act of 2015 permanently extended the IRA Qualified Charitable Distribution to allow individuals age 70½ and older to make direct transfers totaling up to $100,000 per year to 501(c)(3) public charities, without having to count the transfers as income for federal income tax purposes.

Who qualifies?
Individuals who are age 70½ or older on the date of the gift.

How much can I transfer?
$100,000 per year.  Each spouse may make an IRA QCD of $100,000 per year from his or her own IRA.

From what accounts can I make transfers?
Transfers must come from your traditional or Roth IRA directly to Mercy. If you have retirement assets in 401k, 403b or other retirement accounts, you may roll those funds into an IRA, and then direct the IRA administrator to transfer the funds from the IRA directly to Pomona. Note, however, that you will need to satisfy any remaining required minimum distribution from the retirement account before rolling over to the IRA, so this option may work best for an IRA QCD planned for the next calendar year.

To what charities can I make gifts?
Mercy High School and other qualified public charities under Section 170(b)(1)(A) of the Internal Revenue Code, to which deductible contributions can be made.

Can I use the IRA Qualified Charitable Distribution to fund life-income gifts (charitable gift annuities or charitable remainder trusts), donor advised funds or supporting organizations?
No, these are not eligible under current law.

Can I use the IRA Qualified Charitable Distribution to support a particular purpose, like financial aid?
Yes, IRA Qualified Charitable Distributions can be designated to support important needs of the high school in the same way as other outright gifts.

How will Mercy count the gift?
We will give you full credit for the entire gift, the same as other outright gifts.

What are the tax implications to me?
Federal — You do not recognize taxable income on the transfer to Mercy, provided the funds go directly from the IRA administrator to the school. However, you are not entitled to an income tax charitable deduction for your QCD gift.

State — Each state has different laws, so you will need to consult with your own tax advisor. Some states have a state income tax and will include this transfer as income. Within those states, some will allow for a state income tax charitable deduction and others will not. Other states base their state income tax on the federal adjusted gross income or federal tax paid. Still other states have no income tax at all.

Does this transfer qualify as my required minimum distribution (RMD)?
Yes. For those born after June 30, 1949, required minimum distributions (RMDs) from IRAs begin at age 72. For those born on or before June 30, 1949, RMDs have already begun (at age 70½). Once RMDs begin, you are required to take minimum distributions from your retirement plans each year, according to a federal formula. IRA QCDs count towards your IRA RMD for the year.

Can my spouse also make an IRA Qualified Charitable Distribution, even if we are married and file jointly?
Yes, every individual can use the IRA Qualified Charitable Distribution for up to $100,000 each year.

How do I know if an IRA Qualified Charitable Distribution is right for me?
You are at least age 70½, and:

• You have RMDs and do not need the additional income from the distribution, or

• Your charitable gifts already exceed the relevant annual cap (based on a percentage of adjusted gross income), so you do not benefit from an income tax charitable deduction for additional gifts, or

• You do not itemize deductions.

What is the procedure to execute an IRA Qualified Charitable Distribution?
Your IRA administrator may have its own form to initiate a Qualified Charitable Distribution, and, if so, it is best to use the custodian’s form.  If your provider does not have its own form, we have a sample letter that you can prepare and send to your IRA administrator to initiate a QCD.

Please call us at 650.762.1190 when you initiate the QCD so we can look for the check from your IRA administrator and issue the appropriate receipt.

More Questions and Answers on the Tax Implications of IRA Qualified Charitable Distributions

Can IRA Qualified Charitable Distributions be deducted as charitable gifts?
No, but IRA Qualified Charitable Distributions are as valuable as deductible contributions because they are not subject to income tax, so no deduction is needed.

If the gift cannot be deducted, why would I want to take advantage of the opportunity?
Many donors view the IRA Qualified Charitable Distribution as a way to manage their taxable income.  The amount of the qualified IRA Qualified Charitable Distribution is excluded from income and can lower your Adjusted Gross Income (“AGI”) to:

• Save you from owing higher taxes on Social Security benefits and paying higher Medicare premiums; and

• Make you less likely to be subject to the 3.8% tax on net investment income.

Are there advantages with regard to Adjusted Gross Income (AGI)?
Yes.  Since charitable deductions are limited by AGI, the IRA Qualified Charitable Distribution allows donors to maximize charitable contributions while minimizing AGI.  And the IRA Qualified Charitable Distribution may allow especially generous donors to benefit from contributions beyond their AGI limits.

I take the standard deduction, instead of itemizing, so I cannot deduct charitable donations.  Does the IRA Qualified Charitable Distribution help me?

Yes! Since the IRA Qualified Charitable Distribution counts toward any RMD you may have and is not subject to tax, your benefit is equivalent to an income tax deduction even if you do not itemize your deductions.

 

How to Make a Qualified Charitable Distribution to Mercy

1) Contact the Advancement Office to ensure that we have your name in our database exactly as you have it on your tax records. Mercy will update your records as needed.

2)  Discuss with the Advancement Director Mary Lund, 650-762-1191, or Assistant Director of Advancement Carol Fraher at 650.762-1192 your intent to make a distribution so that we can work together on your gift,  discuss what your gift will support (where needed most, tuition assistance, endowment etc) and then work together with our Finance Department to watch for the Distribution.  Contact your Financial Advisor to determine if this is the right charitable gift for you.  Mercy does not provide any professional financial advice or recommendations.

3) Contact your IRA Administrator. There are two ways to send the gift:  by check or by electronic funds transfer (this is often preferred).  Below is a sample letter to email your administrator if they are sending a check.  Mercy’s Tax ID number is  94-1230999. 

By Check:

Mercy High School
2750 Adeline Drive
Burlingame CA 94010
650.762.1190

Electronic Funds Transfer:

Transfer Information

Routing Transfer Number
Bank Name:
Address:
Account Number:
Beneficiary Account Name:	Mercy High School

 

Sample Letter to your IRA Administrator

Date:

Name of IRA Administrator
IRA Administrator Address

RE: Request for Charitable Distribution from IRA

 

Dear IRA Administrator,

Please accept this letter as my request to make a direct charitable distribution from my Individual Retirement Account # ______________________ as provided in Section 408(d)(8) of the Internal Revenue Code of 1986, as amended.

Please issue a check in the amount of $___________ payable to Mercy High School and mail it to:

Mercy High School
Advancement Office
2750 Adeline Drive
Burlingame, CA 94010

In your transmission to Mercy, please include my name and address as the donor of record in connection with this distribution and indicate that this distribution should be used to support (where needed most, tuition assistance, endowment etc).  Please copy me on your transmittal.

It is my intention that this distribution qualify for exclusion from my taxable income as a qualified charitable distribution during the 2021 tax year.  Therefore, it is imperative that this distribution be delivered to Mercy no later than December 31, 20xx.  For your reference, Mercy’s Tax ID number is  94-1230999.

If you have any questions or need to contact me, I can be reached at _______.

Thank you for your assistance in this matter.

Sincerely,

 

Full name as you use on your IRS
Address
City state zip
Phone
Email

If you have questions about the tax implications of IRA Qualified Charitable Distributions, please contact your tax advisor.  Mercy does not provide tax advice.  This is provided as general information only.  Please work with your IRA administrator as laws may change quickly. For more information, please contact the Advancement Office at 650-762-1190 or email Mary Lund, Director of Advancement.

Want to make a big gift to Mercy High School, Burlingame without touching your bank account? Consider giving us real estate. Such a generous gift helps us continue our work for years to come. And a gift of real estate also helps you. When you give us appreciated property you have held longer than one year, you qualify for a federal income tax charitable deduction. You avoid paying capital gains tax. And you no longer have to deal with that property's maintenance costs, property taxes or insurance.

If you have a DAF, deed it to the DAF, which will liquidate it and distribute to any beneficiaries.

Another benefit: You don't have to hassle with selling the real estate. You can deed the property directly to Mercy or ask your attorney to add a few sentences in your will or trust agreement.

Please contact us to learn more about the many ways to give real estate!

Please confirm with your attorney as laws change on a regular basis and we do not offer tax advice.

If you have a loved one who has been impacted by Mercy High School, Burlingame, establishing a memorial or tribute gift is a meaningful way to honor your loved one or celebrate a special occasion such as a birthday while supporting the work of our mission. Your memorial or tribute gift will be a lasting tribute to your loved one and make a difference in the lives of those we serve.

Many. people choose to make a memorial or tribute gift to the Mercy Mass Program.  Indicate the gift is a Tribute Gift at the bottom of the online giving page. www.mercyhsb.com/giving

An endowment gift to Mercy High School, Burlingame today provides a brighter picture for our future. When you make a donation to our endowment, you give a gift with both immediate and long-term benefits.

Here's how it works: Endowment donations are invested. A portion of the annual income from the investment is used to address immediate needs at Mercy High School, Burlingame. The remaining funds are reinvested to ensure indefinite support. 

You may also establish a named endowment fund with a minimum commitment of $25,000 over five years. The endowment will be formally established with terms and conditions, naming opportunity and distribution on interest.

For more information, contact the Advancement Office at 650.762.1190.

 

A donor advised fund, which is like a charitable savings account, gives you the flexibility to recommend how much and how often money is granted to Mercy High School, Burlingame and other qualified charities. You can recommend a grant or recurring grants now to make an immediate impact or use your fund as a tool for future charitable gifts.

You may also choose to nominate as the beneficiary of your Donor Advised Fund,

Please contact us to learn how to do this!

Tools for Professional Advisors
Legal name: Mercy High School, Burlingame
Federal tax ID number: #94-1230999
Located in: Burlingame, CA

Partner With Us
We understand that gifts to charities such as Mercy can be an important part of your clients' overall financial and estate plans. That's why we're committed to working with you to ensure that your clients find the charitable arrangements that best meet their needs. We believe that charitable planning is a process that ideally involves the donor, professional advisors and our gift planning staff—all working together to arrange the best gift possible.