Planned giving is a technique that helps you maximize the personal benefits of your charitable giving, allowing you to make gifts you thought were well beyond your abilities. This can be achieved by following the tax laws and benefiting from charitable tax deductions. The following avenues of giving can be tailored to meet your specific financial and philanthropic needs.
A bequest is a provision in your will or trust that directs a portion of your estate to a named beneficiary, such as Wayne State Foundation. Charitable bequests reduce your taxable estate and may also provide significant estate tax savings.
It is never too early to include Wayne State Foundation in your estate plans. Your will or trust can designate a specific asset, a percentage of the remainder of your estate or all of the remainder of your estate. This can be done by adding an amendment to your existing will.
You can choose how the funds from your bequest gift are to be used. Unrestricted gifts are extremely valuable as they allow Wayne State Foundation to apply the funds to the College’s greatest needs, while restricted gifts benefit a particular department or program. An endowment is a fund that is maintained in perpetuity, and only a portion of the annual investment return is used for the purposes specified by the donor. The rest of the return is reinvested for growth. Such endowments, which typically bear the name of a donor, leave a meaningful legacy and reflect your commitment to Wayne State College.
This is an affordable way for younger donors to make a significant gift to Wayne State Foundation. Donating a life insurance policy to Wayne State Foundation is a cost effective way of making a sizable gift that otherwise may not be possible during your lifetime.
You may already own a whole life policy where the original purpose for purchasing the protection no longer applies. By naming Wayne State Foundation as the owner and irrevocable beneficiary of your policy, you will receive a charitable deduction for the lesser of the total policy premiums paid or the net cash value of the policy. If the policy you donate is not "paid up," you can make annual tax-deductible gifts to cover the continuing premium cost.
If you purchase a new policy and name Wayne State Foundation as owner and irrevocable beneficiary, your periodic premium payments are considered a charitable contribution. Gifting a new policy to the Wayne State Foundation is an attractive option for young donors who desire to make a significant gift but have a small portfolio.
You may also name Wayne State Foundation as the primary beneficiary of your life insurance policy without transferring ownership but since this is considered a revocable arrangement for a future gift, no current tax deduction would be available.
Charitable Gift Annuity
A charitable gift annuity is an irrevocable contract between you and Wayne State Foundation. In exchange for a gift of cash, real estate or marketable securities, the Foundation promises to pay a fixed amount each year to one or two beneficiaries for the rest of their lives. Upon the death of the last beneficiary, the remaining balance of the gift annuity benefits Wayne State College as specified by you in the contract.
Financial benefits include:
Charitable Remainder Trust
A charitable remainder trust (CRT) is a gift arrangement that allows you to provide income to yourself or others while making a significant deferred gift to Wayne State Foundation. The income may continue for the lifetimes of the beneficiaries you name and/or a fixed term. After the death of the last beneficiary or the end of the trust term, the assets in the trust pass to the Foundation to be used as specified in the trust document.
Cash, marketable securities or real estate can be used to establish your trust. The Foundation can serve as the trustee and thereby manage the investment of the trust assets, handle all of the administrative duties and prepare the annual trust tax return. The trust payout rate will depend on the number of beneficiaries, their ages, and other variables.
The Charitable Remainder Unitrust (CRUT) allows your payout rate to be determined annually based on the markets performance. The Charitable Remainder Annuity Trust (CRAT) will pay you a fixed rate for the rest of your life, with no investment worries or responsibilities.
Charitable Lead Trust
A charitable lead trust provides an annual distribution to Wayne State Foundation (that benefits a designated area) for a specified number of years or a lifetime. After the trust terminates, the trust assets are returned to you or to individuals that you wish to benefit (children, grandchildren). The trust may be established during your life or after you pass away.
The charitable lead trust is a complex vehicle that can offer significant financial benefits to you and your family:
A charitable lead trust is not a tax-exempt entity. Due to its complexity, we recommend you consult with your professional advisors in addition to a member of our staff.
Retirement Plan Assets
The current law states that any remaining balance in your qualified retirement plan is fully includable in your estate for tax purposes and can be subject to both income tax and estate taxes. By naming the Wayne State Foundation as a beneficiary of your retirement plan, both forms of tax are avoided. The value of the estate is reduced for tax purposes which could benefit heirs.
Currently, legislation is being considered that will allow donors to transfer funds from retirement plans during their lifetime directly to qualified charities and avoid taxation.
This information is presented for illustrative purposes only and should not be relied upon as tax advice. Donors should consult their professional advisors.
If you wish to receive more information, please contact Kevin Armstrong, Director of Planned Giving, Wayne State Foundation at (402) 375-7534, or fill out our online response form.