Generations E DUCATI N G
at the University of Illinois at Chicago
GIFT PLANNING IDEAS FROM THE UNIVERSITY OF ILLINOIS FOUNDATION
SPRING 2019 | ISSUE 93
Lifelong Friends Establish a Scholarship for Medical Students A bequest from David Morowitz and beneficiary designation from Alan Morris will establish the MorowitzMorris Scholarship in the College of Medicine.
David Morowitz and Alan Morris
The two met on their first day of college as undergrads at the University of Illinois, Urbana campus. Though the two 17-year-old pre-medical roommates shared plenty of coincidental similarities, both of background and their interest in medicine, their personalities couldn’t have been more different.
“I remember being awestruck the first night in our dorm with the way Alan hung his trousers,” David recalls. “They were suspended upside down by the cuffs from his top drawer so his pants wouldn’t crease or wrinkle. Alan is and has always been disciplined— so organized, prompt, and methodical.” David, on the other hand, according to Alan, is a modern day Renaissance man—someone passionate about music, art, and literature. The most important thing to know about David, Alan explains, is that he’s an extraordinary physician because he’s someone who understands human sensitivity and strives to extend his compassion to patients. Both men credit their 63 years of friendship and UIC’s “hands-on” approach to medical education for their transformation from students to the distinguished physicians they became, David specializing in gastroenterology and Alan in orthopedic surgery. Though practicing different INSIDE specialties, when asked what future scholarship recipients should keep in mind, both answered • The “State” and Your Estate identically that science and humanism, together, • Avoiding Probate–Free and Easy should be guides to a successful professional career. • Estate-Gift Language “We both received a top-tier education that was so inexpensive compared to current costs,” Alan said. “We’ve already done just about everything together, so we decided we should pool our resources and create this scholarship together!”
• Estate-Planning Pointers • Did You Know? • Increase Your Income with a Gift • Tax-Free Gifts from Your IRA • Student Spotlight
THE “STATE” AND YOUR ESTATE One of the most important things you will ever do is identifying the people and organizations you want to be the beneficiaries of your assets. How you make those decisions varies greatly depending on your unique circumstances and significant life experiences and values. But to ensure that your decisions are honored, it is absolutely vital to express your wishes in a well-crafted and effectively executed will or trust. If you don’t have a will or trust, your state of residence will follow set rules of how to distribute your assets. These are known as laws of intestate succession, and they vary from state to state. Leaving it up to the state almost always results in unintended outcomes and consequences as well as unnecessary expense and delay. You will incur some expense in having a will drafted and will also need to invest a little time in communicating your desires to a competent estate attorney. Once done, however, it will be one of the wisest investments you ever made.
AVOIDING PROBATE—FREE AND EASY Most people dread the thought of their estate being held up in legal proceedings and subjected to public disclosure and associated costs of probate, which can be significant. The traditional remedy is to have an attorney draw up a living trust. However, that, in and of itself, can be costly and time consuming. Enter “transfer-on-death” (TOD) and “payable-on-death” (POD) plans. Use of TOD and POD plans is skyrocketing because they are a free and easy way to avoid the probate process. The most popular assets donors use to benefit their heirs and charities are bank and brokerage accounts and real estate. To execute a POD plan, you simply request the appropriate form from your bank or brokerage firm and name the beneficiary(ies) of your account. When you die, the proceeds of the account will be distributed directly to your beneficiary(ies) without cost or delay. A TOD deed can also be executed on a piece of real estate. In this case, the property will be transferred without cost or delay to the beneficiary(ies) you named on the TOD deed. This requires the help of an attorney, of course, but is still very simple. Contact Us or Your Advisors Today to Learn More About POD and TOD Plans!
Estate Gifts—Safe and Simple Please consider including UIC in your estate plan by using the following language in your will or trust or on beneficiary-designation 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, please contact us to obtain further information to ensure that your wishes are carried out.
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PLANNING POINTERS
Leaving Untaxed Assets to Family Can Be Costly Did you know that when you leave untaxed assets, such as an IRA, 401(k), or taxdeferred annuity, to family or anyone else that the income tax you avoided will eventually have to be paid? This means as much as 37% could be lost, depending on the size of the account and tax bracket of your beneficiary. Furthermore, if your estate is large enough to be taxed, as much as 80% could be consumed by the combined income and estate taxes. However, when you leave untaxed assets to a charity, such as the University of Illinois Foundation, there is $0 taxation—so 100% is preserved to be used for a purpose important to you, such as scholarships. It is for this reason that tax-wise donors leave these assets to charity and give other assets, such as real estate, stocks, and bank accounts, Did You Know… to their heirs. Like POD and TOD plans, using a beneficiary form for these assets also You can donate appreciated avoids the expense and delays of probate. property, like stocks or real
Take Care of Family AND Charity A life-income plan, such as a charitable remainder trust or a gift annuity, is a way to give a surviving loved one the security of lifetime income with the remainder passing to charity.
estate, and receive a tax deduction for its full current value. Plus, you pay $0 capital-gain tax! Considering your cost may be a fraction of the current value, your tax savings may very well exceed what you paid.
Situation: Mary would like to make a substantial charitable gift to UIC under her will, but she is concerned that her second husband George will need income from her estate. Solution: Mary directs in her will the creation of a charitable remainder trust that will make annual payments to George for life and pay the remainder to us at his death. This gift will establish an endowment in accounting to honor Mary’s first husband who was a UIC accounting major.
Leave a Permanent Legacy: Endow Your Annual Gift Many of our most faithful annual donors are pleased to learn they can, in effect, continue giving annually beyond their lifetimes. Here’s how: If your annual gift is $1,000, you can establish an endowed fund with $25,000 that will distribute approximately $1,000 year after year in perpetuity. You can target your endowment amount using a 4% distribution rate, which is about how much an endowment distributes each year. For example, a $250,000 endowment will distribute approximately $10,000 annually. You can endow your annual gift while living or with an estate gift using one of the methods outlined in this newsletter. Your endowment can also grow over time due to investment returns that exceed the distribution rate. For example: If the fund distributes 4% but earns 7% annually, the extra 3% growth would double the endowment value every 24 years or so. Use These “Planning Pointers” Now to Benefit Your Family and Charity! Copyright © Pentera, Inc. All rights reserved. Please consult your attorney regarding any legal information contained herein.
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Increase Your Income with a Gift Lock in guaranteed lifetime income with a gift annuity AND enjoy these additional benefits! • Help educate future generations • Avoidance of capital-gain tax • Immediate income-tax savings • Tax-free income potential • Convert risky stocks to guaranteed income
ONE LIFE Age Rate
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Go to www.uif.giftplans.org to check your annuity rate. NO POSTAGE NECESSARY NO POSTAGE IF MAILED NECESSARY IN THE IF MAILED UNITED STATES IN THE UNITED STATES
Attn: Jason James Shuba, J.D. University of Illinois Foundation 2525 University Hall, MC 002 601 South Morgan Street Chicago, IL 60607
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ROLLOVER! Good IRA
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Direct gifts from your IRA to benefit UIC can: 1. Be an easy and convenient way to make a gift from one of your major assets. 2. Be excluded from your gross income: a tax-free rollover. 3. Count toward your required minimum distribution. For your gift to qualify: • You must be 70½ or older at the time of your gift. • The transfer must go directly from your IRA to the University of Illinois Foundation. • Your total IRA gift(s) cannot exceed $100,000. • Your gift cannot result in anything of value in return, such as income or athletic ticket preference.
STUDENT SPOTLIGHT “There is never a dull moment when I walk into the UIC theatre. I always feel at home there. My scholarship allows me to pay the remaining cost of my tuition so that I can shine and learn while being my true self. I am so thankful for this support because it allows me to continue following my passion without the financial stress.” —Marieange Louis-Jean College of Architecture, Design and the Arts, Class of 2020 Trudy Abarbanel Scholarship Recipient
PLEASE SEPARATE THE CARD BELOW AND RETURN!
Please send me the following guide(s): n Planning Your Will for All It’s Worth n Giving Appreciated Property: How to Get the Most Out of It n Income for Life: The Charitable Gift Annuity (CGA) n Please provide me/us a personalized, no-obligation CGA illustration based on the following information: Gift being considered: $___________ Age 1: ______ Age 2: ______ Annuity payments deferred until (if applicable): ___/___/___ n I would like information about using my IRA to make tax-free gifts. n I would like to notify you that I have already included UIC in my estate plan.
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Request your complimentary guide online at www.uif.giftplans.org/YourWillUIC or return the attached reply card.
§ Provide flexibility for family circumstances.
§ Decide whether to add a trust to your will.
§ Choose the specific type of bequest that is best for your family.
§ Plan your bequest to meet your charitable objectives.
Make sure you decide who will receive your assets. Our complimentary guide, Planning Your Will for All It’s Worth, explains how you can:
Request Your Complimentary Guide to Start Planning Your Will Today! Office of the Vice Chancellor for Advancement 601 South Morgan, 2500 UH (MC002) Chicago, IL 60607-7128
www.uif.giftplans.org
Jason James Shuba, J.D. Director of Gift Planning, UIC (312) 585-9038 shuba@uif.uillinois.edu
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