Many people plan to make charitable gifts--someday, when they can afford it. Unfortunately, good intentions don't always carry us to our goals. Gift planning is a thoughtful strategy that may allow you to make the gift of your choice while benefiting your personal finances. This is possible through advantageous tax laws that provide powerful incentives to support public and private charities.
Through gift planning, it is possible to reduce or eliminate federal and state taxes owed on the value of a gift. Gift planning can work in your favor when it comes to paying taxes on income, capital gains, gifts, an inheritance, and your estate. These tax benefits are available to individuals at all income levels.
The Rutgers University Foundation's Department of Gift Planning staff understands the tax laws and can guide you in planning your charitable gifts. They can help you in all aspects of gift planning, including suggesting options for appreciated securities and property, and maybe increasing your income in the process.
They can work with your professional advisor and can supply you with draft documents for your attorney's review and advice. The gift planning information may be helpful to you right now.
Contact the department of Gift Planning to set up a confidential meeting to discuss your goals and concerns.
Gift Planning Assistance - It's not just for wealthy people
Whether you are saving for retirement, a child's college education, or a down payment on your first home, you need to plan your route. The Rutgers University Foundation wants to help you reach your goal. Many people don't realize that philanthropy can be an important tool in financial planning. Certain charitable gifts, properly packaged, can reduce taxes, generate income, or free up frozen assets. This type of philanthropy, called gift planning, can be especially useful if you have appreciated securities or real estate. We can explain several income-producing and tax-saving strategies related to charitable giving.
A Rutgers Foundation gift planning representative can also come and speak to your club or civic group. These talks are easier to schedule on or near one of the three Rutgers campuses in Camden, Newark, and New Brunswick/Piscataway. If you are farther away, call us anyway. Our representatives do a considerable amount of traveling and can accommodate you.
Regardless of your age or income, you can benefit from financial and estate planning. Even if you are not considering making a charitable gift at this time, call Liz Truslow , Vice President for Gift Planning, at (848) 932-8808 for gift planning assistance.
Among the various gift planning strategies for financial planning are:
- Charitable Gift Annuity
This type of gift is a contract between you (the donor) and the Rutgers Foundation whereby the foundation guarantees to pay you, or persons you designate, income for life in exchange for a gift of cash or marketable securities. There are some rules. The gift must be valued at $10,000 or more, and you may not receive the income until after your 60th birthday. The income you will receive varies depending on your age when payments begin. The benefits include possibly increasing your retirement income, reducing current income taxes, and reducing future estate taxes. You may name yourself, your spouse and/or another person to receive the income.
- Charitable Remainder Trusts
Variations of this gift vehicle are called a Charitable Remainder Unitrust or a Charitable Remainder Annuity Trust. Whatever the title, these programs pay quarterly interest to one or more people for life or a specified number of years. Eventually the amount remaining in the trust passes to Rutgers. An amount of $100,000 or more is recommended with this strategy, because each trust is a separate managed portfolio of investments, designed to meet your individual needs. The donor may be entitled to a charitable income tax deduction and a reduction in estate tax. The donor may also avoid capital gains tax by using appreciated property or securities.
- Charitable Lead Trusts
Lead trusts are the opposite of remainder trusts. Income from these trusts is paid to Rutgers for a term of years or a lifetime, and then the trust investments are returned to you or your family. Besides providing support to Rutgers, you may receive a significant charitable income tax deduction or a reduction in estate tax. Properly planned, this can enable you to pass on property that you expect to grow in value with little or no estate tax.
- Rutgers In Your Will
No one can predict the future. Affecting the future is another matter and entirely possible. One way to introduce your ideals and goals to future generations is to leave a legacy gift to Rutgers. Perhaps you want to ensure that a certain research laboratory continues to have the most advanced equipment, or that bright – but financially strapped – students have access to scholarships. There are more than 1,500 distinct programs and projects at Rutgers. Or, you may wish to support Rutgers' primary mission of excellence in education, research, and public service through a gift to the general fund. Whatever you select, you can be certain that a bequest to Rutgers will carry your goals forward.
Legacy gifts are among the most popular types of deferred gifts because of their great impact and because they are completely revocable. Should your circumstances or goals change, the bequest amount or ultimate designation can be easily altered. There are several ways to make a bequest to Rutgers. You and your attorney can decide which is best for you. A foundation representative would be happy to provide sample wording for your review and your attorney's opinion.
If you decide to include Rutgers in your will, please consider alerting the foundation in advance. This helps the university plan for the future and acknowledge donors while they are still living. You also become eligible for membership in the Colonel Henry Rutgers Society. Society members receive a seasonal newsletter featuring articles on Rutgers and financial planning tips. In addition, Colonel Henry Rutgers Society members are invited back to campus for several events, including an annual luncheon featuring a lecture by one of the university's esteemed faculty. Members are also invited to special events around the country.
- Outright Gifts
Outright gifts are usually presented in one lump sum. The simplest is cash, or, with current technology, an electronic check or bank transfer. However, gifts of stocks and bonds, tangible personal property, real estate, intellectual property and even life insurance can be considered an outright gift and may offer you significant benefits. Outright gifts can be made in your name or in honor or memory of someone else. Please note your preference at the time of the gift.
- Stocks and Bonds
If you are holding appreciated securities and have owned them for longer than 12 months, there may be a tax advantage in giving them to Rutgers. These so-called "long-term" holdings may bring you a charitable income tax deduction equal to their current fair market value. In addition, the capital gain may not be recognized as taxable income. However, for short-term holdings (securities you have owned less than 12 months), you may be limited to a tax deduction for only the amount you paid originally.
- Tangible Personal Property
A gift item directly related to Rutgers' broad mission of research, education, and public service -- for instance, the gift of a painting to the Jane Voorhees Zimmerli Museum -- is often fully tax deductible at its fair market value. Gifts not related to Rutgers' mission are deductible based on what you paid for the item. This is called a cost basis deduction. If you are interested in giving Rutgers some personal property, a foundation representative can help you sort out the differences.
- Real Estate
Highly appreciated real estate can be a tax burden. Donating the property to Rutgers can bring tax advantages similar to that of donating appreciated securities. If you have owned the property for at least one year before giving it to Rutgers, you earn a charitable deduction equal to the full fair market value, less any outstanding mortgage. The property is also removed from your taxable estate. Options exist that allow you to give your home to Rutgers and continue to live in it or to derive a lifetime income from the property.
- Life Insurance
If you already own a policy with a significant cash surrender value, you may be able to make a major gift without affecting your current investment or cash flow. For example, you may have bought a policy years ago when family needs were great. Now your children are on their own, and you no longer need that protection for them. The donation of an existing whole life policy will carry a charitable deduction of approximately the cash surrender value.
For more valuable estate planning information please CLICK HERE