Advancement: Gift Examples
Gifts that Return Income
You can support Burr and Burton and at the same time receive income back from your gifts. These gifts are known as charitable gift annuities and charitable remainder trusts (CRT). A CRT can provide a meaningful gift to Burr and Burton and yield numerous benefits, among them:
- an immediate income tax deduction
- a fixed and guaranteed return in uncertain financial times or the potential for growing income
- no capital gains tax when appreciated assets are contributed
- the chance to turn unproductive assets into an income source, all without a capital gains tax bill
- a reduction in estate tax
Charitable Gift Annuity
Simple contracts, charitable gift annuities allow you to exchange cash or marketable securities for guaranteed income payments from Burr and Burton. With a minimum initial gift of $10,000, charitable gift annuities can be established for one or two income beneficiaries. You can delay the start of payments until a future date you select, for higher income and a larger deduction. Payment rates are based on the age and number of income beneficiaries at the time the gift is made, and the time intervening between when the gift is made and payments begin. Donors earn an income tax deduction in the year the gift is made and a significant portion of the income payments may be tax exempt.
Charitable Remainder Trust
With a charitable remainder trust (CRT) a donor places cash, securities or other marketable assets in trust. In return, the trust pays you and/or other beneficiaries of your choosing a variable annual payment equal to at least 5% of the fair market value of the trust as valued annually. This amount fluctuates with the market value of the trust. Different types of charitable remainder unitrusts provide opportunities for growth and flexibility; such trusts are ideal for illiquid asset contributions, such as real estate.
More than two people can be income beneficiaries. Upon the death of the income beneficiary or the expiration of the trust term, the remaining trust property goes to Burr and Burton to be used as you designated when making the gift.
Bequests and Testamentary Gifts
Burr and Burton’s history is steeped in a tradition of bequest support. Founded in 1829 through a $10,000 bequest from Josiah Burr, Burr Seminary changed its name in 1855 to Burr and Burton Seminary in recognition of founding trustee Josiah K. Burton’s own bequest and his wish to encourage the education of women.
To this day, charitable bequests continue to be an important factor in Burr and Burton’s ability to adapt, to grow and to meet the changing needs of its students. Bequests are often the best way for alumni and friends to make a meaningful gift to the school. We encourage you to consider making a provision in your estate plans for the school, no matter the size of the gift.
Bequests and testamentary gifts may take many forms:
- a specific amount of cash, stock or other assets from your estate or retirement plan account
- a fixed percentage of your estate or retirement plan account
- a percentage of your residuary estate or what remains after all expenses are paid.
If you already have a bequest planned for Burr and Burton, we hope you will inform us. If Burr and Burton is not in your estate plan, we hope you will consider naming the school as a beneficiary.
Individual Retirement Accounts: While qualified retirement plans are wise retirement income strategies, they are highly ineffective as inheritance funds. When included in an estate plan, the funds in a retirement account are subject to double, even triple, taxation. In particular, when heirs receive the balance in a qualified plan, income tax is due on the funds.
Careful planning can minimize the taxes on your estate. Rather than have retirement assets sharply reduced by income tax and, in many cases, estate tax, use these assets for charitable giving and preserve other assets that are not as heavily taxed for heirs.
We encourage you to send us a copy of that portion of your will naming Burr and Burton as beneficiary. This ensures that Burr and Burton will be able to use your bequest as you intend and it allows Burr and Burton to plan its future with greater confidence. All correspondence will be held in strict confidence.
If you are currently working with a financial planner or estate planner and need an idea of the language need to include a bequest in your will, please click on this link Sample Bequest Language and we will provide you with some samples.
Other Types of Gifts
As Burr and Burton’s needs are varied, so are the means for meeting those needs. Listed below are several ways of giving that you might consider.
Life Insurance Policies
Life insurance is usually purchased for the protection of one’s family in order to replace a financial loss caused by the death of one or more family members. Whole life insurance can be used as an investment to accumulate capital. For this reason, whole life insurance policies can be attractive assets for contribution. You can make a gift of life insurance to Burr and Burton by designating the school sole owner and beneficiary of the policy.
Charitable Lead Trust
With a charitable lead trust, assets given to the trust provide income to Burr and Burton for a fixed term of years and provide you with a gift/estate tax deduction. At the end of the trust term, the principal goes to your heirs. A charitable lead trust is a tax-efficient way to pass assets to heirs while at the same time making a significant gift to Burr and Burton.
Retained Life Estate
You can make a gift of your home or farm to Burr and Burton and retain the right to live in the home or use the property for your lifetime. By giving the title of your personal or vacation home to Burr and Burton, you will be entitled to an income tax deduction for a portion of the fair market value of the property. A retained life estate is a terrific way to make a gift now to Burr and Burton and benefit from immediate tax savings without changing the way you enjoy the property.
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