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Glossary of Planned Giving Terms

A contractual agreement to pay a fixed sum of money to an individual at regular intervals. A charitable gift annuity makes lifetime payments to the benefactor and/or another individual.

One named in a will, trust or other legal document to receive an interest in as estate.

A direction in a will to pay over or distribute person property is a bequest. Also called a legacy.

See Cost Basis

Capital Gains Tax
A federal tax on the appreciation of an asset between its purchase and sale prices.

Charitable Gift Annuity
An agreement in which you transfer cash of other assets to a charitable organization in exchange for its promise to pay you an annuity for life.

A legal instrument made to modify an earlier will.

Cost Basis
The original value of an asset, such as stock, before its appreciation or depreciation.

Estate Tax
A tax on the net value of property subject to tax (“taxable estate”) plus the sum of the “adjusted taxable gifts” at the time of a person’s death. It is based on the right to transfer or transmit.

The person named in a will to administer the estate (known is some states as the “personal representative”).

Fair Market Value
The price that an asset would bring on the open market.

Gift Tax
A tax on the donor of inter-vivos gifts (those made during life), based on the right to transfer or transmit, and payable primarily by the donor.

Gross Estate
Total property or assets held by an individual as defined for federal estate tax purposes.

Life Income Gift
A planned gift that makes payments to the benefactor and/or other beneficiaries for the lifetime, then distributes the remainder to charity.

Planned Giving
A way for generous individuals to make larger gifts than they otherwise could make by using planning techniques to provide for both charity and their heirs in ways that maximize the gift and/or minimize its impact on the donor’s estate.

The process of providing a will’s validity; used loosely to mean the administration of an estate.

Testamentary Trust
A trust established through the will of the grantor.

An individual or organization carrying out the wishes of the person who established the trust, paying income to the beneficiaries and preserving the principal for ultimate distribution.

A legal instrument disposing of a person’s property at the time of his or her death.

“Where’s Scott?”

Debi and Scott Kroman's Story:

The young girls in Lark Cottage eagerly anticipate the monthly evenings with their Special Angels of the Five Acres Children’s Guild.  Debi Kroman wanted to share the experience with her husband Scott but needed to figure out how to entice him to join this group of women.

Debi and Scott are successful professionals whose parents “came from nothing” in Kansas and Europe.  They share solid values and high principles that were passed on by two very different heritages.  The Kormans consider themselves fortunate and want to pass on to the Lark girls the guidance and help they know is crucial.  Debi says, “When you look at our society, you see that life isn’t as simple anymore.  It is not as easy for kids.”  

Without children of their own, Debi and Scott decided to become involved in the lives of children who live in their own community of Altadena.  Debi became a “special friend” to one of Five Acres’ boys but found dealing with separation when he moved on after two years emotionally difficult.  When one of Debi’s clients suggested she join the Guild, she knew she’d found the ideal way to “give back.”   

Scott agreed to come to the Guild’s annual summer barbecue for the Lark girls and “flip the burgers.”  The girls eyed him warily at first but soon decided they liked having a man around the house.  So much so that at the next Guild gathering the girls asked, “Where’s Scott?”  He’s been a regular ever since.

When asked, “Why Five Acres?” Debi and Scott agree that observing up close how their donations are used, the stability of staff who stay for decades, and the stories of “hopeless” cases turning into successes confirm that there’s no better place for them to invest their time and resources.

Debi and Scott have wisely created an estate plan that relieves their families of difficult end-of-life decisions and also ensures that their legacy at Five Acres will live on. 

For information about how you can provide for your loved ones as well as the causes you care about, please contact Cynthia Nickell at (626) 798-6793 Ext. 2250 or email her.