Deferred gifts are often called "planned gifts" because they
are integrally connected to financial and/or estate plans. They range
in size from smaller bequests to multi-million dollar trusts. They are
called deferred gifts because even though they are given today, the benefits
by ABAC will not be realized until sometime in the future.
Estate
Gifts Estate gifts are those gifts normally associated
with your Will or final distribution of your estate. Estate gifts may
be a few hundred dollars or millions of dollars. Like all other gifts they
may be "unrestricted" for use where need is greatest within the college, or
"restricted" to a particular program, scholarship, or area. Your
estate gift allows your assets to continue helping ABAC long after you are
gone.
Estate gifts are typically the largest gifts to the
college and are made up of the following:
Charitable
Gift Annuities include Annuity Trusts and Unitrusts. These allow
you to avoid taxes on capital gains and reduce estate taxes.
Life Estate Agreements
allow you to give your home or farm to ABAC, but retain the right to
occupy and use the property for life.
Bequests, or gifts by Will, are popular
options for those who want to provide for ABAC in the future.
Life Insurance Policies
are ways to make a significant gift to ABAC. Paid-up policies
and policies in progress are accepted.
Charitable Gift Annuity
A Charitable Gift Annuity is a simple agreement between you and the ABAC
Foundation designating a gift for ABAC. In exchange for your gift
of cash, securities, or certain types of other assets (possibly real
estate or timber rights), the ABAC Foundation will agree to make fixed,
periodic payments to you and/or another beneficiary for life. A
portion of the payment to you may be tax-free, or taxed at the more
favorable rate for taxes on capital gains. You will be entitled to
an immediate federal income tax deduction for a portion of your gift.
The amount of the deduction will be based upon the amount of the gift,
your age and/or another beneficiary, and the annuity payment rate.
When the gift annuity ends, its remaining principal passes to the ABAC
Foundation to be used per your designation with the college.
Charitable Remainder
Trusts
There are two main types of charitable remainder trusts:
Annuity Trusts and Unitrusts. With both types of
trusts, you receive a charitable contribution income tax deduction based
on your life expectancy, you avoid taxes on capital gains on the sale of
appreciated securities or real estate, and you reduce potential estate
taxes. The main difference between the two types of charitable
remainder trusts is the way your annual income from the trust is
determined.
Charitable Remainder Unitrusts allow you to
transfer cash, securities, or other property to a trust and are
usually created with assets worth $250,000 or more. The assets
given to charitable remainder unitrusts are valued each year,
allowing for a variable payout from year to year, in contrast to the
fixed dollar amount payout from the annuity trust. The
unitrust is often used when inflation and its effect on the future
purchasing power of a fixed income is a concern and you want to
benefit you and/or another beneficiary for life.
Charitable Remainder Trusts and Life Insurance
Trusts (Wealth Replacement Trusts) offer a combination of a
trust and life insurance. The charitable remainder trust
provides lifetime benefits to you, the donor, and then after death
to the college. The life insurance trust replaces to your
heirs the asset value given to charity and may increase your heirs'
net inheritance over what they would have received had you not made
the charitable gift.
Life Estate
Agreements (Retained Life Estates)
A life estate agreement allows you to give your home and/or farm
to the college today, but retain the right to live in the home or use
the farm for life. You may also stipulate that your spouse may
continue to live there for his/her lifetime. You receive an
immediate income tax deduction based upon your age(s) and the useful
life of the property, and you remove the home and/or farm value from
your estate. However, you must continue to maintain the property,
insure it, and pay property taxes. After your death, the ABAC
Foundation becomes owner of the property and may utilize the property to
support college-related purposes or sell the property to generate funds
to support the college.
Bequests (Gifts by Will)
A bequest may be particularly attractive as a gift
option if you want to provide for the college in the future. Bequests
may be designated to the college program of your choosing or used where
the need is greatest within the college.
"Specific" bequests are most common. You leave
a specific amount of money, a specific asset, or a specific percentage
of your estate to support the college.
"Residual" bequests go to support the college
only after all debts, expenses, taxes, and other bequests have been
paid.
"Contingent" bequests are ways for you to
support the college even if you have young children. The contingent
bequest takes effect only when all other bequests are exhausted.
Life Insurance Policies Two forms of life insurance are typically donated:
paid-up whole and universal life insurance policies, and newly
issued whole and universal life insurance policies. A paid-up policy
has a cash value that may be used immediately if necessary to support
the college.
Taking out a new whole life or universal life
insurance policy is one way to make a significant gift to the college.
The policy may be structured such that you only pay premiums for
approximately ten years and each year's premium payment is
tax-deductible.
Newly issued whole and universal life insurance
policies usually have little or no cash value. Therefore, they provide
no benefits until significant cash value builds within the policy or the
insured passes away.
For all whole and universal life insurance policies,
you should name the ABAC Foundation as both owner and
beneficiary. Return to Top
Life Income Gifts Life Income Gifts are often referred to as
the gift that gives back to you. You may make a gift of cash,
securities, and/or real estate to the college and retain the right to
receive income from those assets for as long as you live. At your
death and/or the death of the last beneficiary, the college receives the
remaining principal to be used as you have indicated. Life income
gifts provide either an income or the use of some asset for the duration of
your life.
Life income gifts are made up of the following:
Pooled Income Funds allow you
to give away assets while retaining the right to receive interest
income.
Pooled Income Funds Pooled Income Funds are designed to allow you to
give away assets, such as stocks or bank savings, while keeping the
right to receive the interest and/or dividend income. The college
may use the remaining principal only after your death (and the death of
one surviving beneficiary if one is designated).
A pooled income fund gift provides several financial
and estate planning benefits:
1. You retain income for life (if you donate a typical dividend-paying
stock you may approximately double the quarterly income you were
receiving).
2. You avoid taxes on capital gains on the sale of appreciated
securities.
3. You remove all or most of the assets donated from your estate,
thereby reducing potential estate taxes.
4. You receive an income tax deduction based upon your age (usually
around 40% of the amount donated).
5. You eliminate your day-to-day investment decisions and worries.
6. Eventually, your gift will be a significant benefit to the college.
Qualified
Retirement Plan Assets
Historically, a personal residence was the largest asset
in an estate. Currently, because of changes in tax laws and the
tremendous historical growth of the equity markets, qualified
retirement plans occupy a significant portion of many, if not all,
taxable estates. The rise in the value of the assets held in
qualified retirement plans has created new problems and opportunities.
In most cases, qualified retirement plans subject the owner, their
heirs, or their estate to income tax liability, as well as potential
estate tax liability. A gift of a qualified retirement plan asset
can offset these liabilities.
Funds set aside in your tax-deferred retirement
accounts are tax-deferred, not tax-free. You will pay taxes on the
income you receive in distribution from these plans. There are
ways to minimize the tax burden of holding these plans until death.
Instead of leaving these tax-deferred retirement assets to your family,
who will pay the resulting income taxes, consider designating the ABAC
Foundation as the named beneficiary of your qualified retirement plan to
support the college. This designated gift will pass your assets
free of estate and income tax. Return to Top
When donors provide gifts to the ABAC Foundation
the institution and the donor sign a Gift Agreement. This
legal document insures all parties of the gift's intent and purpose.
For an overview and specific options related to you, please contact the
Office of College Advancement:
Office of College Advancement
ABAC 13 - 2802 Moore Highway
Tifton, GA 31793
(229) 391-4900