THE LEGACY PROJECT EMBRACING OUR HERITAGE AND PLANNING OUR FUTURE
2011–2012
For more than 50 years, the College of Coastal Georgia has served as a partner with the coastal region in providing outstanding higher education opportunities. This mutually beneficial relationship has enhanced the growth and prosperity of the region by providing a better educated workforce. In 2009, the College of Coastal Georgia stepped through the transformative threshold of becoming a four-year baccalaureate institution. This new status has brought new goals, higher aspirations, and important challenges. The support and partnership of the surrounding communities are needed more than ever for the College to reach its highest potential. Historically, gifts and grants promote achievement and provide the margin of excellence for academic institutions. The Legacy Project is a new endeavor of the College of Coastal Georgia Foundation. This project brings an emphasis to methods of planned giving that may provide tax incentives while maintaining benefits for donors and their families. We invite you to thoughtfully review the options outlined in this booklet as you consider your charitable interests.
James A. Bishop Co-Chair
Alfred W. Jones, III Co-Chair
THE LEGACY PROJECT COLLEGE OF COASTAL GEORGIA FOUNDATION The Legacy Project was established by the members of the Foundation to assist in the development of a comprehensive giving program that links philanthropic-minded individuals, families, foundations, and companies with appropriate opportunities and interests at the College of Coastal Georgia. Directed by a committee comprised of key community leaders, business professionals, and foundation trustees, The Legacy Project seeks to advance the goals of the College by assisting in cultivating donors who will support the College of Coastal Georgia. Co-chaired by James A. Bishop and Alfred W. Jones, III, The Legacy Project members work in partnership with Foundation committees. The Foundation seeks through The Legacy Project to expand the College’s margin of excellence and to continue strengthening and enhancing higher education opportunities in the coastal region. This significant project will have an enduring impact on the future of the College of Coastal Georgia and the thousands of students it serves.
Our Mission The College of Coastal Georgia Foundation develops resources to support the College in providing quality educational programs. The Foundation also serves as an advocate within the coastal Georgia community to further the goals of the College and, in turn, represent the needs of the community.
GIFT AND TNAM HE LEG IN GAOPPORTU CY PROJECT N ITIES 1
1
METHODS OF GIVING There are a variety of ways to support the College of Coastal Georgia and its new mission as a comprehensive four-year institution of higher learning. Below is a general outline of some of the methods for giving to the College. Gifts by Will One of the most prevalent methods of establishing an educational legacy is for individuals to designate a substantial gift from their estate to the College of Coastal Georgia through a provision in their will. You may leave in your will a gift representing a percentage or all of your estate to the College. Or, you may make a gift of a specific amount of money or property. Since a will does not take effect until your death, you retain full ownership of your assets during your lifetime. Making a will gives you control of your estate and how it is dispersed. You may wish for your gift to be used for immediate needs of the College, or you may specify that your gift be held as endowment providing income to the College in perpetuity. While you will not receive any income tax deductions for making a gift in your will, the gift will qualify for an estate tax charitable deduction, thereby reducing or eliminating any applicable estate tax.
Eight Reasons You May Need to Revise or Update Your Will 1. Change in Marital Status
5. Birth of a Child
2. Death of a Family Member
6. Change in Assets
3. Change in Tax Laws
7. Interstate Move
4. Change of Executor
8. C hange in Status and Age of Children
2
T H E C O L L E G E OF C OASTAL GE OR GIA
CHARITABLE GIFT OPPORTUNITIES In addition to gifts made under your will, the IRS recognizes several gift arrangements that allow you to make a gift today but retain an income stream or use of the property. Qualified Charitable Gift Annuity A qualified charitable gift annuity enables you to make a gift of cash or securities to benefit the College of Coastal Georgia, while retaining a guaranteed annuity for life. Because a charitable gift annuity is designed to assure that a substantial portion of the assets you give will remain to benefit the College, the rate of your annuity will be significantly lower than a commercial annuity. However, because part of the annuity is considered a charitable gift, you also receive an income tax charitable deduction for the benefit expected to the College. A portion of the annuity you would receive every year would be tax-free for the period of your life expectancy. If you fund your gift with appreciated property, all or a portion of this otherwise tax-free amount will be capital gains income. The remaining portion of the annuity would be taxed as ordinary income. Charitable Remainder Unitrust If you own a highly appreciated asset, such as real estate or stock, that you would like to sell so you can reinvest the proceeds, you probably will have to pay a substantial capital gains tax. If so, you may wish to consider placing the property into a charitable remainder unitrust, also known as unitrust. This is one of two forms of the charitable remainder trust vehicle. Unitrusts are tax-exempt entities, so property placed into the trust can be sold without incurring any capital gains tax. Thus, all the proceeds can be maintained in the trust for investment on your behalf. T HE LEG A CY PROJECT
3
This estate planning method allows you to receive income from the trust during your lifetime. At your death, the trust assets automatically pass to the College. You will receive an income tax charitable deduction for the present value of the amount expected to pass to the College in the future. The value of the trust assets will be computed every year during your lifetime. As the value of the assets in the trust changes, your income interest will change along with it. You choose the rate of return paid to you from the trust, although it must be at least 5 percent. A unitrust can be established during your lifetime or at your death through your will. A testamentary trust allows you to pay income to someone else for their lifetime, thus reducing the estate tax that would be incurred if the entire asset were passed outright to the friend or family member. Charitable Remainder Annuity Trust A charitable remainder annuity trust is the other form of charitable remainder trust and operates similarly to a unitrust except that the income interest is set at the beginning of the trust and does not change from year to year, as does the unitrust. As in the unitrust, you may choose the annuity rate you would like to receive from the trust, however, it must be at least 5 percent. In both remainder trust forms, the income obligation is limited to the trust assets. Typically, a charitable remainder annuity trust is funded with cash or publicly traded securities. You will receive an income tax charitable deduction for the present value of the gift. At your death, the assets remaining in the trust pass to the College. Remainder Interest Gifts It is possible to receive an income tax deduction during your lifetime and have the gift of your home, farm, or ranch take effect upon your death. This arrangement is known as a gift of a “remainder interest.� 4
T H E C O L L E G E OF C OASTAL GE OR GIA
Through this option, you transfer/deed the property to the College of Coastal Georgia Foundation while retaining use of the property during your lifetime. At your death, the property automatically passes to the Foundation. You would receive an income tax deduction in the year you make the gift, based on your age and the value of the property as determined by a qualified appraisal. This estate planning option enables you to retain all the privileges and responsibilities associated with owning your property. Even if you choose to vacate the property during your lifetime, several options exist that would provide you an income stream. The most common option is to join with the Foundation to sell the property and receive income from the investment of the sale’s proceeds. Charitable Lead Trust You may own assets that produce income that you do not currently need, or you may not want to pass your estate directly to family members after your death because of estate taxes or so-called generation skipping taxes. If this is the case for your family, you may wish to place assets into a trust that will pay income to the College for a specified period of years, then at termination of the trust pass the trust assets to your children or grandchildren, thus reducing or eliminating gift, estate, and generation skipping taxes. This gift and estate planning method is called a charitable lead trust. You can create this trust during your lifetime or at your death through your will. Another option with a charitable lead trust is to have the trust revert to you at the end of the term instead of to your family. These are complex trusts that provide either gift, income, or estate tax charitable deductions. As with gifts given through your will, any gift you make to the College may be designated either for immediate use or for endowment, with the income being paid out to the College in perpetuity. Ordinarily, the charitable deduction you receive for gifts
T HE LEG A CY PROJECT
5
of cash or property that are not appreciated can be used to offset up to 50 percent of your adjusted gross income in the year the gift is made. If you cannot use all of the deduction in the first year, you ordinarily may carry the remainder over and use it to offset up to 50 percent of your adjusted gross income over the subsequent five years or until the deduction is used up, whichever comes first. On the other hand, if your gift is funded with appreciated property, usually your deduction may be used to offset up to 30 percent of your adjusted gross income. The same carryover rules apply. Endowment and Scholarship Funds One of the most compelling ways to leave an enduring legacy is through the establishment of an educational endowment or scholarship fund. Established at a minimum level set by the Foundation, both of these funds provide a sustaining financial foundation for the College of Coastal Georgia. You may establish a fund and add to it through the years. Any of the split-interest gifts can be used to create these funds as well as leave additional resources for the scholarship or endowment fund you create during your lifetime through your will. An endowment fund is a gift set aside as a permanent fund to generate income for the College. By designating your gift as endowment, you specify that the principal of the gift will never be spent, but the College receives income earned by that principal on a regular basis. This ensures that the College has a steady flow of income it can count on when planning the future. As the principal of the fund grows over the years, the income flowing to the College increases. You can create an endowment fund by making a current outright gift or by establishing a trust that will pass assets to the College at some time in the future. You also may establish an endowment fund through your will. If you wish to establish a fund to help meet the educational needs of deserving students at the College, you can create an 6
T H E C O L L E G E OF C OASTAL GE OR GIA
endowed scholarship fund. The principal of the scholarship fund will be held, as with all endowment funds, and the income generated will provide financial support for the scholarships on a regular basis. With scholarship funds, you may help determine the criteria for selecting the students who will be eligible for your scholarship. For example, you may want to provide a scholarship for students who are studying in majors of particular interest to you or who have financial needs. You may want to provide funds for the College to recruit students of high achievement. All information presented is for general informational purposes only and should not be acted upon without qualified professional assistance. There are limitations on annual deductions for charitable donations. The ramifications of charitable contributions and income and estate tax laws are complex. The College of Coastal Georgia and its representatives do not render legal, accounting, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.
GIFT & NAMING OPPORTUNITIES BOOKLET The Major Gifts Committee of the College of Coastal Georgia Foundation and the Office of Advancement have developed a booklet that provides a comprehensive listing of buildings, special rooms, and endowment funds that may be named for you, your family, or others. For a copy, contact the Office of Advancement at (912) 279-5925 or advancement@ccga.edu.
T HE LEG A CY PROJECT
7
THE LEGACY PROJECT COMMITTEE MEMBERS James A. Bishop
Alfred W. Jones, III
CO-CHAIR THE BISHOP LAW FIRM
CO-CHAIR SEA ISLAND COMPANY
Lisa Wray Anderson, CPA
Ben P. Lee,* CPA
LISA WRAY ANDERSON
COASTAL CPA S
J. Greer Brown*
Don Myers*
MERRILL LYNCH
ADVANCEMENT PROFESSIONAL
Jerry Harper, CPA
Alfred Sams
SCHELL & HOGAN
SUNTRUST BANK INVESTMENT SERVICES
Ben Hartman* HUNTERMACLEAN
Russell Jacobs, III, CFP, ChFC, CLU
Hillary Stringfellow GILBERT, HARRELL, SUMERFORD & MARTIN
JACOBS, COOLIDGE & COMPANY
* Member of the College of Coastal Georgia Foundation Board of Trustees
8
T H E C O L L E G E OF C OASTAL GE OR GIA
BOARD OF TRUSTEES COLLEGE OF COASTAL GEORGIA FOUNDATION Rees M. Sumerford CHAIRMAN
Michael D. Hodges VICE CHAIRMAN
Susan Shipman SECRETARY
Jack Kilgore TREASURER
William F. Torrey, Jr. IMMEDIATE PAST CHAIRMAN
Levi Baisden Mel Baxter David Bluestein J. Greer Brown Gary R. Colberg Fred Coolidge LaVerne Cooper Pat Hodnett Cooper Emily Davenport Melvin J. Deese, Jr., M.D. Jack A. Dinos Bruce Dixon Marie W. Dodd J. Ashley Dukes, R.Ph. Kenneth R. Farrell William H. Gross Duane Harris Ben Hartman Con Holland Michael B. Johnson
Wayne Johnson Ben P. Lee Ron Maulden Laura Cross McKinley Al McKinnon Randal Morris Diana M. Murphy Don Myers Brian Parks Connie Patrick Kathleen W. Russell Diane Sapp David T. Smith, Jr. Tricia Smith Willou Smith William J. Stembler Anita A. Timmons Merry Tipton Lance Turpin David A. Zimmerman Ex Officio
Valerie A. Hepburn, Ph.D. PRESIDENT COLLEGE OF COASTAL GEORGIA
Jeffrey H. Preston VICE PRESIDENT OF BUSINESS AFFAIRS COLLEGE OF COASTAL GEORGIA
Elizabeth K. Weatherly CHIEF ADVANCEMENT OFFICER COLLEGE OF COASTAL GEORGIA
T HE LEG A CY PROJECT
9
THE LEGACY PROJECT A PUBLICATION OF THE COLLEGE OF COASTAL GEORGIA FOUNDATION OFFICE OF THE PRESIDENT AND OFFICE OF ADVANCEMENT COLLEGE OF COASTAL GEORGIA ONE COLLEGE DRIVE BRUNSWICK, GEORGIA 31520 912-279-5925 ADVANCEMENT@CCGA.EDU WWW.CCGA.EDU