Gifting Options - Planned Giving
A planned gift requires careful consideration of the financial, personal, and charitable objectives of the donors and frequently involves input from their financial and legal advisors.
Many planned gifts are outright gifts. Other planned gifts are deferred, with the donor retaining some level of control over the assets for either one or more lifetimes or a term of years.
A life income gift, such as a charitable gift annuity or a charitable remainder trust, pays income to the named beneficiary for life or a term of years. Only after the life income terminates are the funds available to the computer science department for the purpose designated by the donor. The reverse of the life income gift is the charitable lead trust, which provides income to the charity for a period of time and then the trust assets revert to the donor or other beneficiary.
Each of these gift options provides the donor with various advantages depending on the type of gift and the assets used to fund the gift. Possible benefits may include:
- May change the amount and nature of your gift in support of the department anytime prior to your passing
- Can direct how your bequest is to be used
- Retain control over the assets for the duration of your life
- Can delay the gift until the occurrence of a specific event such as the death of your spouse or children
- May provide for the care of your loved ones before the department receives any portion of your estate
Bequests under your will or living trust provide estate tax relief to your estate and may enable you to provide larger benefits to your loved ones since charitable gifts are not taxable.
Please consider sharing with us your plans to benefit the computer science department at NC State's College of Engineering via your will or living trust. Doing so allows us the opportunity to assist you in designating your gift properly and to express our appreciation for your support of the University and qualifies you for membership in the R. Stanhope Pullen Society.
If you are planning to make a will bequest to the department through the NC State Engineering Foundation, this pdf contains sample language which may be helpful to you and your legal advisor.
Naming the NC State Engineering Foundation as owner and the irrevocable beneficiary of the policy will generate an income tax deduction for the donor. Paid-up policies will generally result in an income tax deduction equal to the cash surrender value of the policy.
For policies with premiums remaining to be paid, the deduction is approximately equal to the cash surrender value plus a portion of the last premium payment. If you continue to make future premium payments, you can also receive an income tax deduction for those.
You may also designate the NC State Engineering Foundation as the beneficiary, or contingent beneficiary, of your group term life insurance through your employer. This method of giving will not generate a current income tax deduction, but it will remove the value of the insurance from your estate. Your human resources division can assist you with making such a designation on your group term policy.
If you prefer to retain ownership of the policy, you can name the NC State Engineering Foundation as the beneficiary and the value of the policy will not be taxable in your estate. In this case, there will not be any current income tax deduction.
In addition, your vacation or second home qualifies for this treatment as long as it is used as a personal residence and not a rental property. The immediate charitable deduction allowed for this future gift is the present value of our right to receive the property at some later time. This present value, and the resulting charitable deduction, is determined, primarily, by the age of the life tenants. If the lifetime enjoyment of the property is limited to the donor and his/her spouse, the property will not be taxed in either estate.
Rather than see such a large percentage of your remaining retirement assets eaten up by taxes, you might consider directing that part or all of these excess retirement assets be used to make charitable gifts. While the value of these accounts is still included in your taxable estate, your estate will receive a full charitable deduction for all gifts designated to charity.