 |
|
 |
Deferred Gifts
Deferred gifts are those made in the present and received by the UW Foundation in the future. Some are straightforward, such as a bequest in a will, while others are more complex, providing current tax benefits as well as life income for donors and/or beneficiaries.
Bequest
The most common form of deferred gift is a bequest from the donor’s will. A charitable gift made through a will is 100 percent tax deductible; no federal or state inheritance tax applies to such a gift.
Trust
A trust is a legal instrument with a finite life. In estate planning there are two major types of trusts: a living trust and a testamentary trust. The same basic ideas employed through a will can apply to charitable giving through a trust.
Charitable Remainder Trust
A charitable remainder trust is an irrevocable trust. Under its terms, assets are transferred to a trustee, with income paid to one or more individuals for a predetermined number of years or for the lifetime of one or more individuals. When the designated time has expired, the trust principal becomes the property of the UW Foundation and is used for the purpose specified by the donor.
Pooled Income Funds
Pooled income funds are trusts made up of contributions from many donors. Each fund agreement creates a number of units. When you join the pool, your beneficiaries receive 100 percent of the income that is attributed to your share of the pool for life. The principal then becomes the property of the UW Foundation to be used according to your wishes.
Retirement Plans
Many people participate in various kinds of retirement plans: IRAs, Qualified Pension Plans, Keough plans, etc. In some cases, there may be significant advantages to using retirement plan assets for charitable giving.
Gift Annuity
A gift annuity is a unique charitable gift among the life income agreements. It is part gift and part purchase, with the gift part earning a charitable deduction for the donor, and the purchase portion creating a life income stream to the designated beneficiaries.
Life Insurance
Life insurance is another deferred giving arrangement. A fully paid life insurance policy that you have owned for many years or a new policy can be donated to the UW Foundation. If you choose to give a new policy, you can make a one-time payment to fund the policy or you can make annual premium payments. When the policy is not pre-paid, annual premiums are tax deductible contributions to the Foundation. In order for the gift to be completed, the Foundation must be both the owner and the beneficiary of the policy. Upon the donor’s death, the death benefit value of the policy comes to the Foundation for the purposed specified by the donor.
When the donor names the UW Foundation as beneficiary of the life insurance policy without transferring ownership of the policy, there are no current tax benefits. However, there is a 100 percent estate tax charitable deduction for the death benefit amount.
|
