Naming the individuals and charities that will receive your assets once you are gone can be a simple process. Most assets can pass to your intended beneficiaries by the terms of your will. Other assets, such as retirement plans, life insurance and insurance annuities, however, are not controlled by the terms of your will. These assets instead require separate beneficiary forms.
The beneficiaries of these assets can be easily modified at any time to meet your changing needs:
- IRAs and retirement plans
- Life insurance policies
- Insurance annuities
If you have questions about naming Freed-Hardeman University as beneficiary of any of these assets, please contact Kyle Lamb at 731-989-6019 or firstname.lastname@example.org
CHARITABLE GIFT ANNUITIES
If you'd like to support our mission and receive steady payments during your retirement years, a charitable gift annuity may be right for you.
- How It Works - Through a simple contract, you agree to make a donation of cash, stocks or other assets to Freed-Hardeman University. In return, we agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.
- In addition to providing a gift to Freed-Hardeman University and receiving fixed payments for life, you also receive these benefits:
- Your initial gift is partially income tax–deductible.
- Your charitable gift annuity payments are partially income tax–free throughout your estimated life expectancy.
- Your payments are not affected by ups and downs in the economy.
- The gift annuity can be for one or two people, so your spouse or another loved one can also receive payments for life.
- If you use appreciated stock to make a gift, you can usually eliminate capital gains tax on a portion of the gift and spread the rest of the gain over your life expectancy.
- Your Rate
- Generally, the older you are at the start of your payments, the higher your payments.
- These rates are the maximum rates recommended by the American Council on Gift Annuities and are adjusted periodically.
- Not all organizations offer charitable gift annuities at the above ages and rates. Contact Freed-Hardeman University for a personalized illustration or for more information.
- Example - Jill, 70, established a $20,000 charitable gift annuity. Based on her age, she was able to receive an annuity rate of 5.1 percent. This means that we will pay her $1,020 each year for the remainder of her life, of which $824 is tax-free to her throughout her life expectancy. She'll also receive a charitable deduction of $7,231 if she itemizes on her income taxes (assumes annual payments and a 1.4 percent charitable midterm federal rate). After her lifetime, the remaining amount is used to support the charity's mission.
To make a charitable bequest, you need a current will or revocable living trust. Your gift can be made as a percentage of your estate. Or you can make a specific bequest by giving a certain amount of cash, securities or property. After your lifetime, Freed-Hardeman University receives your gift.
This type of gift offers these main benefits:
- Simplicity. Just a few sentences in your will or trust are all that is needed. The official bequest language for Freed-Hardeman University is: "I, [name], of [city, state, ZIP], give, devise and bequeath to Freed-Hardeman University [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."
- Flexibility. Because you are not actually making a gift until after your lifetime, you can change your mind at any time.
- Versatility. You can structure the bequest to leave a specific item or amount of money, make the gift contingent on certain events, or leave a percentage of your estate to us.
- Tax Relief. If your estate is subject to estate tax, your gift is entitled to an estate tax charitable deduction for the gift's full value.
CHARITABLE REMAINDER TRUSTSREAL ESTATE
A tax-exempt irrevocable trust designed to reduce the taxable income of individuals by first dispersing income to the beneficiaries of the trust for a specified period of time and then donating the remainder of the trust to the designated charity.
Imagine avoiding the hassle of selling a piece of property, with no worry about getting a fair price and at the same time realizing valuable income and estate tax deductions. This can be your reality when you consider using real estate to make a charitable gift to Freed-Hardeman University. Here's what you need to know.
- Did you know? Donating a home or other piece of real estate eliminates the capital gains tax that would be owed if you were to sell it.
- How It Works - You can donate your property outright, place it in a trust or give it through your will. All of these methods will enable you to enjoy personal financial benefits while supporting our work in a meaningful way. Following are details on the most straightforward way to make such a gift: direct donation of your property.
- How You Benefit - In addition to freeing you from the costs and responsibilities of ownership, making an outright gift of property that you've owned for more than a year offers these benefits:
- You obtain an income tax charitable deduction equal to the property's full fair market value. This deduction reduces the cost of making your gift and frees cash that otherwise would have been used to pay taxes.
- You eliminate capital gains tax on the property's appreciation.
- The transfer isn't subject to the gift tax, and the gift reduces your future taxable estate.
|Compare the Benefits of Donating Real Estate vs. Cash ||Give $300,000 |
in Real Estate
|Give $300,000 |
| 1 || Fair market value of gift || $300,000 || $300,000 |
| Ordinary income tax benefits |
| 2 || Charitable deduction || $300,000 || $300,000 |
| 3 || Ordinary income tax savings2 ($300,000 x 35%) || $105,000 || $105,000 |
| Capital gains tax benefits |
| 4 || Cost basis in property || $50,000 || $300,000 |
| 5 || Long-term capital gain || $250,000 || 0 |
| 6 || Capital gains tax savings2 ($250,000 x 15%) $37,500 || $37,500 || |
| 7 || Total tax savings (line 3 + 6) || $142,500 || $105,000 |
| 8 || Net cost of gift (line 1 - 7) || $157,500 || $195,000 |
| Advantage of donating real estate over cash: $37,500 |
Please contact Kyle Lamb at 731-989-6019 or email@example.com if you have any questions about this way of leaving your mark on our organization.
1The amount of your tax deduction for charitable contributions is limited to 50 percent of your adjusted gross income, and may be limited to 30 or 20 percent of your adjusted gross income, depending on the type of property you give and the type of organization you give it to. Any unused amount may be carried over for up to an additional 5 years. Consult you tax professional to discuss your tax benefits.
2Assumes a 35 percent marginal income tax bracket and a 15 percent long-term capital gains tax bracket.