Gifting Options - Planned Giving
A planned gift requires careful consideration of the financial, personal, and charitable objectives of the donors and frequently involves input from their financial and legal advisors.
Many planned gifts are outright gifts. Other planned gifts are deferred, with the donor retaining some level of control over the assets for either one or more lifetimes or a term of years.
A life income gift, such as a charitable gift annuity or a charitable remainder trust, pays income to the named beneficiary for life or a term of years. Only after the life income terminates are the funds available to the computer science department for the purpose designated by the donor. The reverse of the life income gift is the charitable lead trust, which provides income to the charity for a period of time and then the trust assets revert to the donor or other beneficiary.
Each of these gift options provides the donor with various advantages depending on the type of gift and the assets used to fund the gift. Possible benefits may include:
Will or Living Trust Bequests
Gifts of Life Insurance
Life Income Gift
Testamentary Life Income Options
Charitable Lead Trust
Retained Life Estate
Giving with Retirement Plans
Will or Living Trust Bequests
A bequest is the easiest and most common form of planned giving. You may make provisions for the Department of Computer Science through the NC State Engineering Foundation in your will or living trust by designating either a specific dollar amount or a percentage of your estate. By so doing, you:- May change the amount and nature of your gift in support of the department anytime prior to your passing
- Can direct how your bequest is to be used
- Retain control over the assets for the duration of your life
- Can delay the gift until the occurrence of a specific event such as the death of your spouse or children
- May provide for the care of your loved ones before the department receives any portion of your estate
Bequests under your will or living trust provide estate tax relief to your estate and may enable you to provide larger benefits to your loved ones since charitable gifts are not taxable.
Please consider sharing with us your plans to benefit the computer science department at NC State's College of Engineering via your will or living trust. Doing so allows us the opportunity to assist you in designating your gift properly and to express our appreciation for your support of the University and qualifies you for membership in the R. Stanhope Pullen Society.
If you are planning to make a will bequest to the department through the NC State Engineering Foundation, this pdf contains sample language which may be helpful to you and your legal advisor.
Gifts of Life Insurance
Life insurance may be used in several ways to make a gift in support of the Department of Computer Science in the College of Engineering at NC State by assigning the ownership to the NC State Engineering Foundation, designing the computer science department as recipient of the funds. The charitable deduction for gifts of life insurance depends on the type of policy, the status of the premiums and ownership of the policy.Naming the NC State Engineering Foundation as owner and the irrevocable beneficiary of the policy will generate an income tax deduction for the donor. Paid-up policies will generally result in an income tax deduction equal to the cash surrender value of the policy.
For policies with premiums remaining to be paid, the deduction is approximately equal to the cash surrender value plus a portion of the last premium payment. If you continue to make future premium payments, you can also receive an income tax deduction for those.
You may also designate the NC State Engineering Foundation as the beneficiary, or contingent beneficiary, of your group term life insurance through your employer. This method of giving will not generate a current income tax deduction, but it will remove the value of the insurance from your estate. Your human resources division can assist you with making such a designation on your group term policy.
If you prefer to retain ownership of the policy, you can name the NC State Engineering Foundation as the beneficiary and the value of the policy will not be taxable in your estate. In this case, there will not be any current income tax deduction.
Testamentary Life Income Options
You may establish a charitable remainder trust, a charitable lead trust or a charitable gift annuity through your will. Because it does not come into existence until after your death, it will not provide any income tax savings during your lifetime. However, it will provide income for a spouse or other loved one for his or her lifetime and will reduce your exposure to estate taxes.Charitable Lead Trust
The charitable lead trust is essentially the reverse of a charitable remainder trust. Rather than receiving the trust's remainder value, the NC State Engineering Foundation will receive the trust's income for a specified period of time. At the conclusion of the trust, the property either reverts to the donor or to a non-charitable beneficiary designated by the donor. Established during the donor's lifetime or through a will, charitable lead trusts are best for donors who can forego the income generated by the property for the trust's period of existence. The tax benefits for this type of a trust are complicated but can be highly beneficial depending on the tax situation of the donor and his/her family.Retained Life Estate
A provision of the tax law allows you to give your personal residence, or farm, to the NC State Engineering Foundation and to retain for yourself and your spouse or other beneficiary the right to continue to live there for life. During your lifetimes, you retain the full use of the property and continue to pay all expenses related to the property. At the death of the survivor, the property passes to the NC State Engineering Foundation.In addition, your vacation or second home qualifies for this treatment as long as it is used as a personal residence and not a rental property. The immediate charitable deduction allowed for this future gift is the present value of our right to receive the property at some later time. This present value, and the resulting charitable deduction, is determined, primarily, by the age of the life tenants. If the lifetime enjoyment of the property is limited to the donor and his/her spouse, the property will not be taxed in either estate.
Giving with Retirement Plans
Frequently, people reach retirement age with significant wealth accumulation in retirement plan accounts. Unfortunately, assets in these types of plans are included in the owner's taxable estate at death and can be subject to as much as 70% combined estate and income taxes.Rather than see such a large percentage of your remaining retirement assets eaten up by taxes, you might consider directing that part or all of these excess retirement assets be used to make charitable gifts. While the value of these accounts is still included in your taxable estate, your estate will receive a full charitable deduction for all gifts designated to charity.