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Gift Planning

A Gift of Real Estate

Dorothy Frances Peniston

Dorothy Frances Peniston

Dorothy Frances Peniston worked hard and lived a life of service. Dorothy was one of five children and she never married. She cared for her parents and bachelor brothers, Bunt and Price, as they aged. Many years ago, Dorothy and her two brothers made the decision to leave their family's 460-acre farm in Livingston County, Mo., to Children's Mercy. Upon her death in 2005, Dorothy remained true to their agreement and Children's Mercy became the owner of the Peniston farm. Dorothy had set up a revocable trust during her lifetime and had designated Children's Mercy as sole residuary beneficiary. While the family farm was left to Children's Mercy, Dorothy also remembered family by leaving other assets to a niece, great nephew, and great nieces.

Gifts are made to Children's Mercy by many people, from a myriad of backgrounds with varied connections to the hospital. Many people who leave a gift were treated at the hospital as a child or have a child or grandchild who received treatment at Children's Mercy. Not so in Dorothy's case. According to her niece, Bertie Lou Canning, Dorothy had no such connection to the hospital. The attorney who represented the estate, Lloyd A. Cleaveland, explained the Penistons' decision: Dorothy and her brothers admired the care Children's Mercy provides to all children, regardless of the family's inability to pay. In 2005, Children's Mercy provided over $13 million in charity care.

Just as varied as the individuals and their reasons for giving are the types of gifts. A gift of real estate has advantages for both the donor and the charity. The charity can realize a substantial gift that the donor may not have been able to give otherwise and the donor or the donor's estate may realize tax advantages. In this case, the real estate gift from the Penistons was sold at auction and the proceeds – approximately $865,360 – was received by Children's Mercy.

Dorothy had made small gifts to the hospital over the years, but nothing close to $865,360. The farm that her parents bought in 1920 allowed Dorothy to leave a significant gift to Children's Mercy. Her legacy will help provide care for countless children for years to come.

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The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.

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Contact Phil

Phil Watson
Managing Director of Philanthropic Gift Planning
(816) 701-4339
pawatson@cmh.edu

Copyright © 2018 The Children's Mercy Hospital

A charitable bequest is one or two sentences in your will or living trust that leave to Children's Mercy a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I give to Children's Mercy, a nonprofit corporation currently located at Kansas City, MO, or its successor thereto, ______________* [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to Children's Mercy or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to Children's Mercy as a lump sum.

You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to Children's Mercy as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and Children's Mercy where you agree to make a gift to Children's Mercy and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.
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