FAQs About Bequests and Trusts
Q. What are life income gifts and why are they so popular with certain donors?
A. You may make a life income gift to the university by irrevocably transferring securities, money, or other property to the University of North Florida. The university then manages the investment of the trust assets and pays an income to you, your designated beneficiaries, or both. The income payments continue for the beneficiary's life or for a term of up to 20 years. After the trust terminates, the University of North Florida receives the fund principal. Charitable remainder trusts and charitable gift annuities are examples of life income gifts.
Q. What are the tax advantages of life income gifts and bequests?
A. Gifts to the University of North Florida, as to other charitable organizations, are not subject to gift or estate taxes. For example, a $10,000 bequest to a charity results in the charity receiving the full $10,000, free of tax. Since estate tax rates are up to 55 percent, that same gift made to an individual (other than a spouse) may result in $5,500 going to the IRS and only $4,500 to the individual. In the case of life income gifts, a tax deduction for the present value of the "remainder interest" in the donated assets is available. More important, however, is the fact that the sale of appreciated assets used to fund a life income arrangement does not give rise to any income taxes on the sale.
Q. How can the University of North Florida help me with planned gifts—life income gifts and bequests?
A. The University of North Florida's Office of Planned Giving has a variety of resources for estate and charitable planning. We would be happy to review with you options that might best suit your needs. We can:
- help you decide if a bequest to the University of North Florida is right for you
- give you options for reducing taxes and benefiting the University of North Florida
- help you choose the best gift technique to minimize taxes
- help you address capital gains taxes on appreciated assets
- help manage your charitable trust benefiting the University of North Florida
Q. Will I need a tax advisor to help me set up a planned gift?
A. The University of North Florida can provide detailed information, including draft language, for your attorney or other advisor regarding gifts to the University of North Florida. It is recommended, however, that you involve your personal tax or legal advisor at some point in the process.
Q. If I include the University of North Florida in my will, whom do I need to tell about it?
A. You need not tell the University of North Florida of your plans. The University of North Florida appreciates; however, knowing when it is included in an individual's estate plans to make sure that the purpose of the gift will always be useful. Besides, we like to show our appreciation to those donors who include us in their estate plans and, in fact, we have an honorary organization to recognize these supporters of the University.
Q. Can I direct how my gift will be used? How can I be sure it will be used as I intend?
A. Just as with any other kind of gift to the University of North Florida, you may designate a particular purpose for your bequest or life income gift. The University of North Florida carefully monitors the stated purposes of all gift funds to ensure that the donor's funds are being used only for the purposes intended.
Q. How can a planned gift help me accomplish more than an outright gift?
A. You may have funds available in a retirement account, real property, or other assets you have accumulated over time. These assets may not be available for an outright gift. They could be designated through a planned gift, which gives you the opportunity to make a larger gift in the future. Planned gifts often achieve more estate and tax planning objectives then outright gifts.
Q. What are the best assets to use for a planned gift?
A. Securities, real property, insurance policies, retirement plans, and many other assets can be used to fund a gift to the University of North Florida. The