GIFT PLANNING IDEAS FROM THE UNIVERSITY OF ILLINOIS FOUNDATION
FALL 2020 | ISSUE 95
Alumnus Embraces Supporting Students in Uncertain Times Despite the challenges related to COVID-19, Bill Gosse (B.S. ’80) knows educating students is a great investment. He wants to help students too poor to pay for college, too rich to qualify for need-based aid, and too average for merit-based scholarships. “It is even more important now to support the shrinking middle class who may not have scholarship or grant awards,” says Gosse. Bill Gosse
That’s why he established the William R. Gosse Scholarship Fund by naming the University of Illinois Foundation (UIF) as a beneficiary of his IRA. His gift will create an endowed fund to support UIC engineering students with a GPA between 2.0 and 3.0 who are not eligible for need-based support, such as Pell Grants. As a student, Gosse didn’t realize the value his degree would have. It wasn’t until later in his career that he saw how critical his education was to getting his first job as a structural engineer. In April 2019, he retired from a rewarding career with the same company that hired him after he graduated. As he planned for retirement, one goal was to give another student the same opportunity he had at UIC. “My plan was to donate one year’s tuition from my estate when I pass away to help a student receive a full scholarship; but through my gift planning conversations, I learned I could create an endowment,” says Gosse. Using his beneficiary designation to create an endowment allows him to fund a scholarship that will transform lives in perpetuity. In addition, the portion of Gosse’s IRA designated to his endowment will pass to UIF completely tax-free, and he will continue to enjoy income from his IRA during his lifetime. While the pandemic heightens an already uncertain future, Bill Gosse’s decision to endow his scholarship transcends these current circumstances and is certain to impact the lives of students for generations to come.
INSIDE • Being Wise in Uncertain Times • Estate Gifts—Safe and Easy • Single and/or No Children? Here’s An Idea … • Need An Attorney? • Campus Life—Fall 2020 • Increase Your Income with a Gift Annuity • Pay Zero Income Tax In 2020— Here’s How! • Student Spotlight
BEING A WISE DONOR IN UNCERTAIN TIMES Being wise in making financial decisions is always important. However, even more thought and wisdom are required when considering charitable giving during times such as these. Making a “wise gift” could be defined as a gift that includes maximum benefits to the charity and also maximum benefits to you, the donor. In calling certain gifts “unwise,” we do not intend to diminish the good they accomplish. We simply mean that there is a better way to structure them. Wise donors figure out the best gifts for their particular situations by answering a number of questions, including:
hat asset should I give? W How much should I give? When should I give? Which giving method should I use? What specific purpose do I want to support?
For help in answering these questions, return the response card to receive a complimentary copy of our guide, How to Be a Wise Donor.
ESTATE GIFTS–SAFE AND EASY Except for the wealthiest among us, most people are simply not in a position to make their “ultimate gift” while living. Instead, most donors make lifetime gifts that don’t jeopardize their standard of living and then create a legacy with their ultimate gift made at death. This preserves the lifestyle they worked so hard to achieve, but also allows them to provide significant support to charitable organizations they believe strongly in that have impacted their lives. If UIC has impacted your life, please join us in the effort to maintain access and affordability and extend the excellence of academic programs for future generations seeking the same success in life that you’ve achieved. It’s as simple as using the following language in your will or trust or on IRA, insurance, or payable-on-death (POD) beneficiary forms: “I leave (e.g., % of estate, $ amount, residue) to the University of Illinois Foundation, an Illinois nonprofit corporation (37-6006007), to be used for (*fill in from options below) at the University of Illinois at Chicago.” *financial need-based scholarships *academic merit-based scholarships *graduate fellowships *faculty research support *general support of educational programs and activities
NOTE: If you would like to designate your estate gift to a particular program or academic unit at UIC, please contact us to obtain further information to ensure that your wishes are carried out. To assist in your estate planning, request our guide Planning Your Will for All It’s Worth by returning the response card or downloading it at www.uic.giftplans.org/guides. 2
Single and/or No Children? Here’s An Idea … When an individual is single, the estate-planning issues they face are somewhat unique. For singles who have no children, the issues can be far more complex and challenging. In most cases, the goal is often to help loved ones without just leaving them a large chunk of money. In that case, they, not you, decide who ultimately benefits from your life’s work. Attractive charitable option: You could establish a charitable remainder trust (CRT) to benefit a sibling, niece or nephew, or other loved one with reliable income; AND you can also designate a charitable beneficiary(ies) to receive the assets after the income recipients are gone. If you establish a CRT during your lifetime, you can lower your current income taxes due to the charitable deduction you receive, and you can also avoid capital-gain tax if you use appreciated property, such as stocks or real estate. You can even set it up so you receive the income for your lifetime, first, and then the others if they survive you.
NEED AN ATTORNEY? Below are two resources many people use to find an attorney. In addition, like the Illinois State Bar, the bar association in your state of residency may have a similar resource. National database of lawyers: www.lawyers.com Illinois State Bar Association: www.illinoislawyerfinder.com NOTE: Be sure to conduct your own due diligence to ensure the services offered will meet your personal estate and tax planning needs.
The other option is to establish the CRT with language in your will or trust. In that case, there is no incometax savings for you, but your loved ones will still receive the income beginning at your death, plus your estate receives an estate-tax deduction and you get to designate the ultimate charitable beneficiary. These planning strategies are very popular, and we would be happy to discuss how they might apply to your specific situation and objectives.
If providing income to someone after you’re gone is an attractive option, contact us for further information. It’s much simpler than you might think!
Campus Life—Fall 2020
The information contained herein is offered for general informational and educational purposes. The figures cited in the examples and illustrations are accurate at the time of writing and are based on federal law as well as IRS discount rates that change monthly. State law may affect the results illustrated. You should seek the advice of an attorney for applicability to your own situation. Copyright © by Pentera, Inc. All rights reserved.
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Increase Your Income with a Gift Annuity Lock in guaranteed lifetime income with a gift annuity AND enjoy these additional benefits! • I mmediate income-tax savings • A voidance of capital-gain tax •C onvert risky stocks to • Tax-free income potential •H elp educate future generations guaranteed income
ONE LIFE Age Rate 65
4.2%
TWO LIVES Ages Rate 65–65
3.9%
70 NOT ENLARGE, 4.7%REDUCE OR 70–70 4.2% IMPORTANT: DO MOVE the FIM and POSTNET barcodes. The Special care must actual size AND placed 75 be taken to ensure 5.4% FIM and POSTNET 75–75 barcode are 4.6% to meet both USPS and automation compatibility standards. 80 regulations6.5% 80–80 5.4% 85
7.6%
85–85
6.5%
Go to www.uif.giftplans.org to check your annuity rate. NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES
BUSINESS REPLY MAIL FIRST-CLASS MAIL
PERMIT NO 144
URBANA IL
POSTAGE WILL BE PAID BY ADDRESSEE
HARKER HALL MC-386 UNIVERSITY OF ILLINOIS FOUNDATION 1305 W GREEN ST URBANA IL 61801-9934
PAY ZERO INCOME TAX IN 2020—HERE’S HOW! Artwork for User Defined (3.75" x 5") Produced by DAZzle Designer, Version 9.0.0
Layout: sampleAct BRM Envpassed with IMB.lyt (c) 1993-2009, www.Endicia.com The CARES was in March to help AmericansEndicia, deal with the April 29, 2011 U.S. Postal Service, Serial # coronavirus. One provision allows you to deduct gifts made with cash in 2020 up to 100% of your adjusted gross income (AGI). This is particularly attractive to donors who want to accelerate completion of a pledge. Example: Jim and Martha made a pledge and still have a $200,000 balance. They would love to help more students sooner, so they take $200,000 out of the bank that’s only earning 0.25% and complete their pledge this year. Their AGI is $220,000, so they can deduct the full amount and reduce their income tax to almost zero.
Donors over the age of 59½ with retirement plans are also taking advantage of this opportunity. Example: Judy is 80 and has her own retirement plans and one she inherited when her husband passed. She doesn’t need any of them to live on and dreads the high taxes on the RMDs every year. To eliminate both, she withdrawals the entire amount and donates it to endow a chair in honor of her late husband. Her AGI is increased by the amount of the withdrawals; but since she can deduct 100% of AGI, there is zero tax due.
STUDENT SPOTLIGHT
“When I received this scholarship, I felt my hard work and dedication were acknowledged and it motivated me to work even harder. The scholarship allowed me to stay fully present in my studies and not worry about providing for my family. I’m forever grateful!” —Irina Ovcinikova Class of 2022
PLEASE SEPARATE THE CARD BELOW AND RETURN!
Please send me a complimentary copy of your new guide(s): n How to Be a Wise Donor n Planning Your Will for All It’s Worth n Please send me information about making a gift that would also provide income for me and/or others. n P lease send me Charitable Tax Planning with Retirement Funds, which includes how to make a TAX-FREE gift from my IRA. n I want to inform you that I have already included UIC in my estate plans and would like to document my intentions. n Please contact me to discuss my giving options.
DETACH HERE
You can also download these materials at www.uic.giftplans.org/guides PLEASE FOLD ON THIS SCORE AND TAPE CLOSED BEFORE MAILING.
NAME
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middle/maiden
last
ADDRESS
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area code
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Your interest and consideration are appreciated.
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Finally, we are here for you and welcome any questions you may have regarding a gift fund you established, an active pledge, or any other gift or gift-planning issue that may be on your mind.
One thing that has not changed is the power of higher education to change lives. We have heard from many of you and appreciate your recognition of this fact. As our featured donor, Bill Gosse, states in the cover story, “It’s even more important now to support students.” As we continue to embrace the challenges we face, please know that your continued involvement and support is critical to our success.
We hope you and your loved ones are remaining safe and healthy through these difficult times. The level of uncertainty brought about by the coronavirus is unprecedented and is affecting nearly everything we do at UIC. One thing we have learned is that “unprecedented” does not mean “impossible.” Please visit our official COVID-19 website for a full rundown of the actions we are taking as we lead in the fight against the pandemic: www.uillinois.edu/coronavirus
TURNING “UNCERTAIN” INTO “EXTRAORDINARY” Embracing the Challenges We Face
Office of Gift Planning and Trust Services University of Illinois Foundation 1305 W. Green St., Rm. 214 Urbana, IL 61801-2962
www.uif.giftplans.org
Jason James Shuba, J.D. Director of Gift Planning, UIC (312) 585-9038 shuba@uif.uillinois.edu
Contact Us:
You may also request your complimentary guides online at www.uif.giftplans.org/Guides.