Winthrop University: Division of University Advancement - Give Your Way - Legacy and Estate Planning

Legacy and Estate Planning

 

Many ways to give - your legacy to create.

 

At Winthrop University, we welcome the opportunity to work with you and your advisors to evaluate your charitable giving strategy. Please review the options below, to learn more about the many giving options available, each with certain tax benefits and income potential. Every situation is different, so it’s important to examine your charitable goals, lifetime income needs and family situation. Together we can begin the process, determine what works best for you, choose the concepts that will help you realize your objectives and put this valuable plan in place.

    A popular and enduring planned gift is a simple charitable bequest, which is a gift made through your will. Bequests are popular because they give you the opportunity to leave a lasting legacy. When you make a charitable bequest, you retain full use of your property during life, so there is no disruption of your lifestyle and no immediate out-of-pocket cost.

    To make a bequest, simply designate that part of your estate passes directly to us. Since a charitable bequest can take many forms, you have remarkable flexibility in how you make this designation. For example, you can leave...

    • a specific asset

    • a specific sum of money

    • a percentage of your estate

    • what remains of your estate after you have provided for all of your other beneficiaries.

    You can also state exactly how you want your bequest to be put to use. Or, you can provide an unrestricted bequest that can be used whenever and wherever it's needed most. Most importantly, you can change your bequest whenever you choose—you remain in complete control of the planning process.

    Contact us for more information about making a bequest.

    A gift annuity is an agreement between you and us. When a charitable gift annuity is in place, we agree to pay you fixed payments for your life (and/or the life of your chosen beneficiary). The amount of the annuity is based on the gift amount and age of the annuitant(s) at the time of the gift.

    A gift annuity can be established with a modest contribution and provides a number of very attractive benefits. You can:

    • fund it with cash or marketable securities

    • qualify for an immediate income tax charitable deduction for the gift (subject to certain income limitations), and

    • potentially spread out any capital gains tax liability.

    What's more, part of your annuity payment may be free of federal income tax for a certain number of years. As a donor, you can select the payment intervals (usually quarterly) and name the annuitant(s) — one or two persons.

    Professionals and other highly compensated employees who frequently max out their annual retirement plan contributions may want to consider a deferred gift annuity strategy. Deferred gift annuities offer three important benefits:

    1. They can be used to supplement qualified retirement plan savings.

    2. You qualify for a current income tax deduction now during your high income years.

    3. You can postpone the start of annuity payments until later — usually after retirement begins.

    Contact us for more information about charitable gift annuities.

    Gifts of long term, highly appreciated securities are the most common type of outright property gift. Donors typically give individual stocks, but bonds or mutual fund shares are also attractive gift options. Outright gifts of securities can be made quickly and these gifts let you do more with your gift because of the very attractive tax benefits.

    A charitable gift of appreciated securities held long term is not considered a sale and does not generate any capital gains tax, no matter the amount of the gain. To encourage gifts of appreciated property, Congress provides a valuable tax incentive—a charitable income tax deduction for the full fair market value of the securities (including the gain) for itemizers.

    For example, if you give shares of stock worth $10,000, you can deduct the full amount on your income tax return (subject to certain income limitations) even if you bought the stock for $1,000. In addition, when we sell the stock, we keep every penny of the proceeds since we are a tax-exempt organization.

    Note: Be sure to transfer the stock directly to us. Do not sell the stock or your will lose this important tax advantage.

    Contact us for more information about gifts of securities.

    Make a qualified charitable distribution from your IRA.

    A qualified charitable distribution from an IRA is a good way for IRA owners age 70½ and over to support our work. It’s easy to do.

    • Instruct your IRA custodian to make a distribution directly to our organization.

    • Although there is no tax deduction, the distribution is excluded from your income for federal tax purposes—no tax is due!

    • Up to $100,000 of your gift (annual aggregate limit) qualifies for this favorable tax treatment.

    • Your gift makes an immediate impact.

    • A qualified charitable distribution from an IRA counts toward a donor's Required Minimum Distribution (RMD) if one is due. Contributions to your IRA after age 70½ can impact the amount eligible for a tax-free transfer.

    Please contact us to learn more about planning and completing a qualified charitable distribution, or click here to calculate you required minimum distribution.

    Many donors use qualified retirement account assets in their charitable gift planning. This is an easy gift to make and has distinct planning advantages.

    Retirement account assets left to loved ones may be subject to higher taxation than other types of assets. By using retirement account assets to make a gift (and selecting alternative assets to leave to family members), you may be able to reduce taxes that otherwise would be imposed on those assets and leave more to your intended beneficiaries.

    Contact us for more information about gifts of retirement account assets.

    One method of making a gift with a retained right to income is a charitable remainder trust. Let's look at some of the benefits a charitable remainder trust can provide:

    • An income for you and/or your beneficiaries for life or a period of up to 20 years

    • An immediate and substantial income tax charitable deduction (subject to certain income limitations) for itemizers

    • Potential avoidance of current capital gains taxes when the trust is funded with long-term appreciated property

    • Reduction of your assets to reduce or avoid estate taxes

    • Substantial reduction of probate costs, taxes, and other estate transfer expenses.

      A gift to a charitable remainder trust qualifies for an immediate income tax deduction, even though income is to be paid to the donor (and/or other beneficiaries) for life. The exact amount of the charitable deduction depends on the:

      • value of the property transferred to the trust

      • amount of income benefits that are payable each year to individual beneficiaries

      • approximate length of time the income benefits will be paid

      • prevailing interest rates at the time the gift is made.

      Despite the tax and financial benefits of a charitable remainder trust, you should consider this kind of arrangement only if you and your advisors determine it is compatible with your overall estate, tax, and financial plan.

      Contact us for more information about charitable remainder trusts.

    A donor who gives us appreciated real estate can completely avoid capital gains tax on the appreciation and qualify for a charitable income tax deduction for the full fair market value of the property.

      A special provision of the tax law allows an immediate income tax charitable deduction for a gift of a remainder interest in your home or farm. With a remainder interest gift, you retain an absolute right to occupy the home or farm for your life (or the life of a family member). The property passes to us only after termination of the life estate(s).

      The charitable deduction allowable for this future gift is the present value of our right to receive the property at some later date. The age of the life tenant is the primary factor in determining the present value of our deferred interest and the charitable deduction. The gift is deductible in the year of the transfer (subject to certain income limitations and assuming the donor itemizes).

      Federal tax laws let donors take a charitable deduction for gifts of fractional interests in real estate. This type of gift can be especially rewarding when you own a vacation home that you use only part of the year.

      Example: Mary and Jim own a $300,000 vacation home that they use for only two months of the year. They can give our institution a 50% interest in the property, qualify for a tax deduction for the value of our interest in the property, and still have a right to use and occupy the property for up to half the year.

      Contact us for more information about gifts of real estate.

     

    Life insurance is also an excellent tool for accomplishing philanthropic goals while realizing other important financial objectives. Life insurance may even allow you to make charitable gifts you never would have dreamed possible.

    Making a gift of life insurance is quite simple. If you are the insured policy owner, you simply transfer physical possession of your paid-up policy to us and file an absolute assignment or transfer of ownership form with your insurance company. Your company then will send a letter to us showing that we are the sole owner and beneficiary of the policy.

      Emmett owns a $100,000 life insurance policy with a cash value of $40,000. No further premiums are due and he no longer needs the coverage. He can ensure that we will receive $100,000 at his death by making us the beneficiary, or he can transfer ownership of the policy to us now. When he transfers ownership, Emmett receives an itemized charitable deduction equal to the lesser of his cost basis or the policy's replacement value.

    Contact us for more information about gifts of life insurance.

     

      Make an irrevocable gift to a fund maintained by a charitable organization and enjoy an income tax charitable deduction for the full amount of the gift. As the name implies, you  can advise the fund regarding distribution; however, donors may not place material restrictions on the fund.

      Create a trust that can be revoked or changed during your lifetime that directs the disposition of your assets, including charitable gifts. A revocable living trust can minimize the cost and delays associated with probate, facilitate asset transfer, provide privacy and, unlike a will, ensure asset management continuity in the event of disability.

      Transfer up to $100,000 (annual aggregate amount) directly from an IRA to us. The gift, available to those age 70½ or over, counts toward your RMD if one is due, and you pay no tax on the distribution.

      Donate a home and retain the right to live in the property for the rest of your life. Qualify for a current income tax charitable deduction on the value of our remainder interest in the home.

      Create a charitable lead trust that benefits us for a number of years, returns assets to your beneficiaries, and minimizes taxes.

      Donate closely held stock. You enjoy a charitable deduction equal to the appraised value of the stock with no capital gains tax due.

      Donate gift property that can be used for our exempt purposes, and qualify for an income tax deduction for the full fair market value.

    Contact us for more information about additional methods of giving.

If you have questions about planned giving or would like more information on any of the gifting options above, please download our brochure, or contact the Office of Gift Planning at 800/801-1083 or giving@winthrop.edu

Last Updated: 12/21/22