Charity Begins at Home
Bill Bracey was recently welcomed into the same Corona del Mar neighborhood he's called home for nearly 35 years.
The likeable World War II veteran received coupons in the mail from local merchants and discounts for area services as a "new" resident. But Bill didn't move across the street - or even change his address. The unexpected greetings were the result of a relocation of sorts, but one merely of paperwork - a transition in which Bill stayed put in the home he cherishes.
Earlier this year, Bill worked with Hoag Hospital Foundation to establish a gift annuity with a retained life estate for his residence. This planning approach transferred ownership of his home to Hoag, while retaining Bill's right to occupy his residence for the rest of his lifetime. This might seem like an out-of-the-ordinary move, but for Bill it quite simply made a whole lot of sense.
Following his beloved wife Joan's passing in 1993, Bill decided to sell the three rental properties they owned together. The unexpected tax consequences took the New Jersey native by surprise. He was determined to seek out a better option to maximize the rate of return on his remaining assets while minimizing his tax liability. Additionally, Bill was in search of a steady stream of income that he, his two children and four grandchildren could benefit from immediately.
For 10 months, Bill pondered the best approach. His home had appreciated greatly since its purchase in 1970, so a plan utilizing this appreciation emerged as an excellent way to take advantage of the current real estate market. A dilemma soon surfaced, however, when Bill discovered that gift annuities were offered by several local charitable organizations close to his heart.
"There's no question that a great number of worthwhile charities exist in our community," says Bill. "However, I knew my decision had to take into consideration the financial stability of the organization. That's why I settled on Hoag."
With this planning approach, an organization's fiscal strength is especially crucial, since the annuity must be funded with liquid assets. As the only double-A bond rated independent hospital in the state, Hoag easily met this criteria, and soon became the clear choice for Bill.
Immediately after finalizing his gift, Bill began receiving a monthly annuity, or fixed payouts, which will continue for the rest of his lifetime. The annuity is calculated based on his age and property value, and a portion of the payouts are tax-free for a period of years as determined by the U.S. Treasury tables.
"This option nearly doubles the rate of return I would have received from other 'stable' investments," notes Bill. "On top of this, I am pleased that my home will benefit Hoag Hospital upon my passing. After all, Hoag is one of the main reasons why I live in this community."
As a faithful volunteer at Hoag Cancer Center since its opening in 1991, the hospital is already benefiting from Bill's generous spirit. He lends his services every Sunday morning. "The way I like to think of it, Hoag is my religion and Hoag Cancer Center is my cathedral," says Bill.
With his gift in order, Bill can now worship with a renewed peace of mind.