at the University of Illinois Urbana-Champaign GIFT PLANNING IDEAS FROM THE UNIVERSITY OF ILLINOIS FOUNDATION
SPRING 2022 | ISSUE 98
Moy Gives Back with Charitable Trusts to Help Future Students Achieve Success
Wai Won Chin Moy (’59 LAS) and granddaughter Deanna Wood celebrating Lunar New Year at retirement community
At 87 years old, Wai Won Chin Moy (’59 LAS) is thankful for her education and the life it has helped provide. Moy earned a degree in chemistry from the University of Illinois Urbana-Champaign and received two master’s degrees from other universities— including one in environmental engineering, which she earned at the age of 42. She began her career in research at a Chicago hospital and went on to be an engineer for the Long Island Lighting Company in New York.
A fulfilling life and fond memories of her time at Illinois have led her to establish two charitable remainder unitrusts with the University of Illinois Foundation. Her gift will provide payments to her for life and then two grandchildren for up to 20 years. In the end, the remainder will support two areas at Illinois including chemistry. “I hope it will help someone like me to finish college and make a good life,” Moy says. “I get a charitable deduction and am leaving something for my grandchildren to remember me.” Moy came from China to Cicero, Illinois, where her family lived and worked at her father’s restaurant. “When you are poor, the only way out is education,” Moy remarks. “Chinese [culture] always admires education and considers it as a way out of everything.” Arriving with a scholarship in 1957, Moy remembers wonderful discussions at Noyes Laboratory and recalls her welcoming roommates at the Stratford House. “The girls slept in an unheated dormitory,” Moy says, “but they all looked after me and insisted that I sleep in the bed in our heated study room.” Through her gift, Moy is looking after not only her grandchildren but future Illinois students who will benefit from her generosity to help them achieve their own academic and career success.
INSIDE • Have you heard? A CGA Can… A CRT Can… • Higher CGA rates create new charitable opportunities! • Student Spotlight • Create Your Illinois Legacy • Make a Gift Tax-Free with an IRA Qualified Charitable Distribution (QCD)
READ ABOUT TWO WAYS YOU CAN MAKE A GIFT AND RECEIVE INCOME FOR LIFE HAVE YOU HEARD? A GIFT ANNUITY CAN … 1. Support an elderly parent with additional income Roger’s mother’s modest pension and Social Security are insufficient for her living expenses, and Roger has been making up the difference with a monthly stipend of $550. In his 32% tax bracket he must earn $809 pre-tax to pay the $550 subsidy. To provide for his mother, aged 82, in a more efficient manner and to support the University of Illinois Urbana-Champaign, with which both he and his mother are affiliated, he decides to contribute $100,000 for a gift annuity, naming his mother as beneficiary. She receives $625 per month, most of which is tax-free, and her after tax income is a little more than Roger has been giving her. Roger realizes tax savings of $17,065 generated by his charitable deduction of $53,328. Although he makes a taxable gift to his mother, he pays no gift tax because of his lifetime gift-tax exclusion. Roger might have funded the gift annuity with appreciated securities instead of cash. He would have had some taxable gain, but it would have been more than offset by the charitable deduction—resulting in net tax savings. 2. Support other people you care about You may establish a gift annuity with the University of Illinois Foundation (UIF) to provide assistance for a sibling or for a nonfamily member such as a friend or for retirement income to a valued employee. 3. Supplement your future retirement income Joan, aged 50, would like to supplement her retirement income, so she contributes stock valued at $50,000 for a deferred gift annuity with payments to begin when she turns 67. She receives a current charitable deduction of $25,576 and can count on $4,500 per year when she turns 67. She also plans to establish additional gift annuities in upcoming years. 4. Provide income for yourself “just in case” Louise has more than enough income for now and is considering making a $100,000 outright gift to UIF for the benefit of the University of Illinois Urbana-Champaign. She worries that her circumstances could change in the future. To make sure she has enough money “just in case,” she arranges with UIF a deferred gift annuity with a flexible beginning-payout date and elects to begin receiving income only if she needs it. Note: The examples are based on the new, increased gift annuity rates that become
effective on July 1, 2022. If the annuity is established prior to that date, the annuity amount and tax benefits will be somewhat different.
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AND A CRT CAN …
Q: I have heard that a charitable remainder trust can A:
pay you income for life and that you can also claim a major tax deduction when you create one. How does that work?
When you establish a CRT, you really create two separate and distinct interests in the same property. First, you create an “income” interest in the form of payments to you or other beneficiaries that you designate. Those payments can be made either for the life of the beneficiaries or for a term of up to 20 years. A beneficiary can be anyone you choose. Second, you create a “remainder” interest, which consists of the trust assets when the trust terminates. These remaining assets are distributed to one or more charities that you designate. For example, you might establish a charitable remainder trust that pays income to you for life and then distributes whatever remains in the trust to the University of Illinois Urbana-Champaign. Because the remaining trust assets are irrevocably committed to charity, you are entitled to an income-tax charitable deduction.
Q: Is there more than one kind of CRT? A: Yes, there are two basic types. One is the charitable remainder annuity trust
(CRAT), which pays a fixed amount to the beneficiary or beneficiaries each year as long as the trust lasts. The other type is the charitable remainder unitrust (CRUT). Although the percentage a unitrust pays each year is fixed, that percentage is applied to the value of the trust principal as it changes from year to year. This variable payment provides some hedge against inflation—often making a CRUT a better choice than a CRAT if there is concern about keeping pace with a rising inflation rate.
To learn more about how these gift vehicles can benefit you and loved ones, contact a gift planning advisor in the UIF Office of Gift Planning and Trust Services at (217) 244-0473 or GPInfo@uif.uillinois.edu.
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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Higher CGA rates create new charitable opportunities! 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
4.8%
TWO LIVES Ages Rate* 65–65
4.3%
70 NOT ENLARGE, 5.3%REDUCE OR 70–70 4.8% IMPORTANT: DO MOVE the FIM and POSTNET barcodes. The Special care must actual size AND placed 75 be taken to ensure 6.0% FIM and POSTNET 75–75 barcode are 5.2% to meet both USPS and automation compatibility standards. 80 regulations7.0% 80–80 5.9% 85
8.1%
85–85
6.9%
Charitable Gift Annuity Rates effective beginning July 1, 2022 NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES
BUSINESS REPLY MAIL FIRST-CLASS MAIL
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POSTAGE WILL BE PAID BY ADDRESSEE
UNIVERSITY OF ILLINOIS FOUNDATION GIFT PLANNING AND TRUST SERVICES HARKER HALL MC-386 HARKER HALL MC-386 UNIVERSITY OF ILLINOIS FOUNDATION 1305 W W GREEN GREEN ST ST 1305 URBANA IL 61801-9934 URBANA IL 61801-9934
STUDENT SPOTLIGHT Artwork for User Defined (3.75" x 5") Layout: sample BRM Env with IMB.lyt April 29, 2011
“I’m focusing on my senior design project this spring and am in the process of designing a robot for the iRobotics competition. I greatly appreciate how this scholarship has allowed me to focus more time on my schoolwork. Following graduation, I intend to give back to ensure future students can have a great college experience like I am.” —Ben Haytcher Mechanical Engineering, Class of 2022 Recipient of the Jason Matthew Brauer Memorial Scholarship
Produced by DAZzle Designer, Version 9.0.0 (c) 1993-2009, Endicia, www.Endicia.com U.S. Postal Service, Serial #
CREATE YOUR ILLINOIS LEGACY
Use this language to benefit the University through your will or living trust: I leave [$x/x%/# of shares/residue] to the University of Illinois Foundation, a nonprofit corporation (Tax ID 37-6006007) located in the State of Illinois, to support the University of Illinois Urbana-Champaign [optional—program/department/college]. Use this language for an account controlled by a beneficiary-designation form: University of Illinois Foundation fbo University of Illinois Urbana-Champaign [program/department/college] Tax ID#: 37-6006007 Attn: Gift Planning and Trust Services 1305 W. Green Street Urbana, IL 61801 Contact us to ensure your specific language can be honored as you intend.
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Please send me a complimentary copy of your new guide(s): n T he Charitable Gift Annuity: 12 Ways It May Benefit You n Enhance Your Financial Security with Effective Use of Charitable Remainder Trusts n I already have included, or am considering including, the University of Illinois Urbana-Champaign in my estate plan and would like to discuss my options. You can also download these materials at uiuc.giftplans.org/guides
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Do you have questions or need a template letter to initiate your distribution? Contact UIF’s Office of Gift Planning and Trust Services at (217) 244-0473 or GPinfo@uif.uillinois.edu.
• You must be 70½ or older at the time you make your distribution. • The transfer must go directly from your IRA custodian to UIF. • Your total QCDs cannot exceed $100,000 annually. • Your distribution cannot include any secondary benefits, like funding a split-income gift or ticketing advantages.
To qualify:
• Is easy (your IRA custodian has a form for you to use). • Is tax free (its amount is excluded from your gross income). • Counts toward your required minimum distribution.
A QCD to UIF for the benefit of the University of Illinois Urbana-Champaign:
Make a Gift Tax-Free with an IRA Qualified Charitable Distribution (QCD) Office of Gift Planning and Trust Services University of Illinois Foundation 1305 W. Green St., Rm. 214 Urbana, IL 61801-2962
uif.giftplans.org
Judy Schneider Director of Gift Planning (217) 244-3351 judiths@uif.uillinois.edu
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