Generations E DUCATI N G
at the University of Illinois Springfield
GIFT PLANNING IDEAS FROM THE UNIVERSITY OF ILLINOIS FOUNDATION
SPRING 2019 | ISSUE 93
Estate Gift Will Continue a Lifetime of Giving to UIS Library “By giving to Brookens Library, I’m contributing to the overall education of students and the University as a whole.” —Paul Buckles Many donors make a commitment through a traditional estate plan. Paul C. Buckles recently signed over a portion of his life insurance to the University of Illinois Foundation to provide unrestricted support for Brookens Library at the University of Illinois Springfield (UIS). “By giving to Brookens Library,” he said, “I feel like I’m contributing to the overall education of students and the University as a whole.” Paul C. Buckles earned an M.A. in history from UIS (then Sangamon State) in 1974. He is especially pleased to have had Professor G. Cullom Davis, a renowned historian and Lincoln Scholar, as his advisor.
Paul Buckles
As a student, Paul spent many hours at Brookens Library, which provided him a place to work on his master’s research project investigating the extension of I-72 from Jacksonville to Quincy. Even now, having retired from a career in social work, Paul still spends many hours studying. He is particularly fascinated by the period of American history from the end of the Civil War to the Depression. During that time, Americans rebuilt their nation, settled a frontier, created labor unions, gave women the right to vote, watched Wall Street rise and fall, and endured the turmoil of the Depression, the Spanish-American War, and World War I. INSIDE Paul has been giving to Brookens Library since 1996. He says his contributions help ensure that UIS students continue to have meaningful learning experiences—the kind he has had throughout his own life. “With this gift,” he said, “I can know that my contributions to Brookens Library will continue for many years to come.”
• The “State” and Your Estate • Avoiding Probate–Free and Easy • Estate-Gift Language • 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 UIS 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 Springfield.” *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 UIS 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 UIS 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
TWO LIVES Ages Rate
65
5.1%
65–65
4.5%
80 85
7.3% 8.3%
80–80 85–85
6.2% 7.3%
IMPORTANT: DO MOVE the FIM and POSTNET barcodes. The 70 NOT ENLARGE, 5.6%REDUCE OR 70–70 5.0% Special care must actual size AND placed 75 be taken to ensure 6.2% FIM and POSTNET 75–75 barcode are 5.5% to meet both USPS regulations and automation compatibility standards.
Go to www.uif.giftplans.org to check your annuity rate.
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ROLLOVER! Good IRA
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Direct gifts from your IRA for the benefit of UIS 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 “I am pursuing cyber security at UIS. I hope one day to prevent companies from being targets of internet threats. I am thankful for my scholarships. They allow me to worry less about financial stress and concentrate more on maintaining a good academic standing during my time at UIS.” —Matthew Neale, Information Security Systems College of Liberal Arts and Sciences, Class of 2020 Recipient of the Naomi and Robert Lynn Distinguished Capital Scholars Scholarship, Ann M. and Raymond Pearson Scholarship, and the Wilbur and Margaret Wepner Estate Scholarship
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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 UIS in my estate plan.
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Request your complimentary guide online at www.uif.giftplans.org/YourWillUIS 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! University of Illinois Springfield One University Plaza Springfield, IL 62707-5407
www.uif.giftplans.org
Justin Seno Associate Director of Gift Planning University of Illinois Foundation (217) 244-8273 jtseno@uif.uillinois.edu
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