Planned or Deferred Gift Opportunities

 

 Bequest
A bequest through a will or trust is the most common form of a planned gift because it is a way to make a substantial contribution to support the College without diminishing the assets available to the donor during his or her lifetime. Because a bequest to Crichton is deducted entirely, without limit, from the taxable estate for estate tax purposes, important estate tax savings can result from this type of gift. Bequests often reduce or possibly eliminate one's federal estate tax burden.

 

 Life Insurance
  Gifts of life insurance can offer an attractive way to benefit the College at a relatively low cost. Life insurance may be especially attractive for young alumni due to the relatively low premium expense. For older alumni and friends, the reason for having the policy in place may no longer apply. For example, the children may be grown, there may be no mortgage remaining on the family home, or a spouse may have other assets for his or her support. In these situations, donating the existing policy may be a wonderful way to support Crichton.

To receive income tax benefits, Crichton College must be named the irrevocable owner and beneficiary of the policy. The insurance premiums are paid to Crichton; the College forwards payment to the insurance company. This premium is tax deductible for federal returns. When the College is named owner and beneficiary of an existing policy, the value of the policy is tax deductible as are the current and future premiums paid. On a new policy, the current and future premiums are deductible.

 

 Retained Life Estate (Real Estate)
  A special provision in the federal tax law allows an individual to give a personal residence (including a vacation home) or farm to Crichton and still retain the full use and enjoyment of the property. The donor would continue to be responsible for the property's maintenance, insurance, and taxes. This retained right to use and live on the property can be for the donor's lifetime or for the donor and a surviving beneficiary's lifetime.

A substantial income tax deduction, based on an IRS formula, is allowed at the time of the irrevocable transfer of ownership to the foundation. There are also substantial federal estate tax savings with this type of gift. All proposed gifts of real estate are reviewed by the College and its Board of Trustees before the gift is accepted.

 

 Retirement Plan and IRA Designations
  Many individuals have amassed large sums of money in their retirement plans and in their IRAs. The federal government's tax structure places a heavy tax burden on these assets at the time of one's death, especially if one wishes to pass these assets to his or her children. If a person names his or her children as beneficiary of his or her qualified retirement plan or IRA, substantial income and estate taxes may be assessed. The total combined tax burden can exceed 80%. In other words, your family would receive only 20% of the retirement plan or IRA.

The solution is often to name a charitable remainder trust as the beneficiary of your retirement plan or IRA. Your children can be income beneficiaries of the charitable remainder trust. This type of gift vehicle can leave your children and your estate in a much better financial position. The Institutional Advancement office would be happy to discuss this planning technique with you in greater detail.


 

 

 Charitable Lead Trust
  A charitable lead trust allows a donor to contribute assets to a trust for a specified period of time. With this trust arrangement, Crichton receives income in support of the College from the trust as a gift. The assets are later returned to the donor or his or her heirs when the trust terminates. The main advantage in creating a lead trust is to reduce federal estate taxes when transferring property to heirs.