Honoring a Legacy and Supporting UIS Students into the Future
Charitable gifts have a remarkable capacity to touch the lives of those they support, those they honor, and even the donors who provide them. Through a gift in his will, Dr. Stephen J. Schwark, professor emeritus of Political Science and Global Studies at the University of Illinois Springfield (UIS), is honoring a colleague and impacting future students.
When Dr. Schwark and his wife, the late Dr. Elaine RundleSchwark, arrived in Springfield in the late 1980s, they were impressed by the “company” they found themselves among—many of whom were founding faculty at Sangamon State. As Dr. Schwark developed the global studies program at what is now UIS, he grew close to colleague David Everson. “Even though he taught American politics, he and I became good friends,” Schwark jested.
After Professor Everson passed away in 1999, his wife, Dr. Judith Everson, requested a memorial fund be established to provide library materials for UIS’ Capital Scholars Honors Program.
Dr. Schwark supported the program from its inception. “I not only wanted to teach the Capital Scholars, I also felt Political Science should be heavily involved and supportive,” he said. When considering how he could make a significant contribution, Schwark established a provision in his will to benefit the UIS David Everson Memorial Fund for Capital Scholars Library Materials.
Both Drs. Schwark and Everson recognize that libraries aren’t static institutions—and neither are the learning styles of exceptional students like the Capital Scholars. So, the fund’s use has been broadened to include enhancing the library’s services more inclusively.
Schwark’s future gift to the Everson fund not only honors his former colleague but empowers the library to support emerging teaching and learning methods campus-wide, enabling UIS to enhance library services for its best and brightest students.
INSIDE
• 3 Smart Ways to Give in the Current Economic Climate
• A Bequest Is the Most Popular Way to Create a Legacy at UIS
• Student Spotlight
• Ways the Omnibus Bill Could Affect Your Charitable Giving
GIFT PLANNING IDEAS FROM THE UNIVERSITY OF ILLINOIS FOUNDATION SPRING 2023 | ISSUE 100 at
the University of Illinois Springfield
3 SMART WAYS TO GIVE IN THE CURRENT ECONOMIC CLIMATE
The appropriate way to make a gift depends on the current economic climate, your financial situation, and your stage of life. Here are some examples, based on various circumstances.
1 Gift of Appreciated Stocks
Situation: The total value of your portfolio of securities has decreased this past year, but that portfolio includes some stocks that have appreciated in value since you purchased them a number of years ago and some that are worth less than you paid for them. Because you have recently sold some of your stocks, you are holding a significant amount of money in cash equivalents. What might you do if you want to help the University of Illinois Springfield (UIS) meet a current need and maximize your tax savings?
Suggestion: Consider contributing outright some of your most highly appreciated stocks held for at least one year. Then use some of your cash to repurchase those stocks or to buy other stocks of comparable quality. You will not be taxed on the capital gain, and you will receive a charitable deduction for the current value of the contributed stocks. The purchase price of the replacement securities is your new cost basis; so if you sell those stocks in the future, you will be taxed only on gain accruing from this point.
2 Percentage Bequest
Situation: You have long planned a larger, impactful gift, but because of uncertainty about the economy and your personal circumstances, you are not comfortable transferring any substantial amount at the present time.
Suggestion: Consider updating your estate documents to include a charitable bequest for a percentage of whatever remains after paying expenses and specific bequests. If your estate turns out to be smaller than you expected, the charitable gift will be correspondingly smaller, having less impact on your heirs. This is a revocable future gift, so you can modify it at any time. An alternative, which may be better from a tax standpoint, is to name the University of Illinois Foundation (UIF) for the benefit of UIS as beneficiary of remaining retirement funds and give other assets to heirs.
3 Gifts That Pay You Income
Situation: You want to ensure enough income to maintain a good quality of life during your retirement years, so you are unwilling to lose the income from any of your investments. You might consider a gift, but only if it would not diminish that income.
Suggestion: There are gift arrangements whereby you can contribute an asset and receive income. Often, the income from that gift instrument will be larger than the interest and dividends you are currently receiving. We would be pleased to prepare for you a financial illustration describing the payments you would receive, the amount of your deduction, and how you would avoid tax on the capital gain if you transfer appreciated assets, such as securities or real estate.
2
Plan Your Gift to Meet Life Circumstances
Establish a Charitable Remainder Trust to Save Taxes and Increase Income
Susan wants to support UIS but is concerned about the economy. She is hesitant to make a large outright gift. She decides to establish a charitable remainder trust. She receives a substantial deduction that reduces her taxes, avoids tax on the capital gain upon transfer, and increases her income.
Donate Your IRA Required Minimum Distribution
Raymond has reached the age where he must take a required minimum distribution (RMD) from his IRA. He doesn’t need the income and would like to avoid paying the tax on his distribution each year. He wants to support student scholarships at UIS and has learned he can direct his IRA custodian to distribute up to $100,000 as a qualified charitable distribution (QCD) to the University of Illinois Foundation. His distribution can satisfy, in whole or in part, his RMD for the year and will not be included in his income.
Combine Present Outright Gifts and a Future Legacy Gift
Sarah has been making gifts to support UIS for 20 successive years. She gives $4,000 per year to support a program she highly values. To ensure that impact continues, she includes a bequest in her will for $100,000 to establish a named endowed fund which allows a percentage of the earnings to be used each year in perpetuity for the program she benefits with her annual gift. As the endowment grows, her distribution to the program will increase. Sarah likes that she can provide help now and into the future with her legacy gift.
The information contained herein is offered for general informational and educational purposes. The figures cited are accurate at the time of writing. State law may affect the results illustrated. This is not legal advice. Any prospective donor should seek the advice of a qualified estate and/or tax attorney or professional to determine the consequences of their gift. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association.
3
A BEQUEST IS THE MOST POPULAR WAY TO CREATE A LEGACY AT UIS
A specific bequest identifies particular assets, while a general bequest provides a certain amount. A percentage bequest expresses the gift as a percent of your total estate, regardless of size. Contact us for bequest language to the University of Illinois Foundation, Tax ID#: 37-6006007, to benefit UIS.
To learn more about creating your legacy and to ensure your specific language can be honored as you intend, visit uis.giftplans.org.
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STUDENT SPOTLIGHT
April 29, 2011
Recipient of the Donald F. Stanhope Scholarship
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“As a Donald F. Stanhope scholarship recipient, I am reminded that the hard work of today creates personal (financial) gain and serves as a seed for impacting and inspiring others in UIS and beyond. Stanhope was a great instrument in the accounting and CPA profession. His legacy continues through scholars like me indicating that I am doing well as an international student, and I truly appreciate this encouraging award.”
—Brighet Akinnuwesi, Class of 2023 MA Accounting
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Want to receive tax benefits and fixed payments for life?
Establish a charitable gift annuity with the University of Illinois Foundation to benefit UIS. Read more at uis.giftplans.org/CGAs
Please send me a complimentary copy of your new guide(s):
n Important Changes Affecting Charitable Giving Strategies in 2023
n Your Questions Answered: Charitable Tax Planning with Retirement Funds
n I have already included, or am considering including, the University of Illinois Springfield in my estate plan and would like to discuss my options.
You can also download these materials at uis.giftplans.org/guides
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Ways the Omnibus Bill Could Affect Your Charitable Giving
The Consolidated Appropriations Act of 2023, known as the omnibus bill, included changes that could affect your charitable gift planning. Individuals who have an IRA and are aged 70½ or older have been able to make tax-free transfers of funds from their IRA to one or more charities and have the amount transferred count towards their required minimum distribution. The maximum amount that could be transferred in any one year was set at $100,000. The omnibus bill will adjust the cap for inflation beginning in 2024. The amount transferred, provided it meets certain requirements, is known as a qualified charitable distribution (QCD). Previously, only IRA transfers for outright gifts qualified as QCDs. The new omnibus bill allows a transfer of IRA funds for a life-income plan that pays income to the IRA owner and/or the owner’s spouse. The transfer can be made in only one tax year, and the contribution limit is $50,000 and will be adjusted for inflation. Provided it meets these requirements, the IRA transfer will be treated as a QCD. To learn more about other changes, visit uis.giftplans.org or call UIF at (217) 244-0473.
