ESTATE PLANNING & LIFE INCOME OPTIONS
HOW THEY CAN BENEFIT YOU, YOUR FAMILY,
AND THE UNIVERSITY OF SOUTH CAROLINA
If you are concerned about your family’s management of assets after
you are gone and want your spouse or companion to enjoy income
from diversified sources after you are gone, the University of South
Carolina has ideas for you and your professional advisors.
THE CHARITABLE REMAINDER
ANNUITY TRUST is irrevocable
and provides a fixed income based
on the value of the assets at the time
the trust is created. Capital gains tax
can be avoided or postponed when
the trust is created, and an income
tax deduction is available for a
portion of the property value. There
can also be estate tax benefits.
The typical donor:
- needs income for life or for a
specified term of years
- has beneficiaries who prefer a
fixed payment
- has giving ability of $100,000
or more
- seeks security of a fixed
payment
- has property that has grown
substantially in value
The trust features include:
- income for life (a fixed payment)
- generally one or two
beneficiaries
- a high minimum, often as high
as $100,000
- funding by cash or highly
appreciated securities or real
estate
- a separately invested trust
- flexible, specific investment
possibilities
THE CHARITABLE REMAINDER
UNITRUST is also an irrevocable
trust but provides fluctuating
income based on a fixed
percentage of the trust’s annual
value. Capital gains tax can also
be avoided or postponed when the
trust is created, and an income tax
deduction is available for a portion
of the value of the property.
The typical donor:
- needs income for life or a
specified term of years
- needs to see income rise as
trust’s value increases
- tolerates some risk in
investment portfolio to provide
for growth
- makes small, often repeat gifts
- tends to be 60 to 77 years old
- seeks moderate income-tax
deduction
- has property that has grown
substantially in value
The trust features include:
- income for life (variable payments)
- possibility of multiple
beneficiaries
- high minimum, such as
$100,000
- funding by cash or highly
appreciated securities or real
estate
- a separately invested trust
- flexible investment possibilities
for the beneficiary
THE CHARITABLE LEAD TRUST
allows the donor to provide an
institution with income for a
period of time determined by
the donor (7, 10, 17, 27 years or
more). The assets are then given
to one or more beneficiaries who
receive the remainder trust. It
can be possible to transfer assets
to heirs with little or no estate and
gift taxes due.
The typical donor:
- has substantial holdings and no
need for more income
- wants to pass assets intact to
heirs
- wants to minimize transfer
taxes
- has used a lifetime exclusion
- tends to be entrepreneurial;
the family business may be the
funding asset
- has substantial giving ability
- holds assets that are expected to
appreciate
The trust features include:
- income to the institution,
corpus to heirs
- arrangement for assets to pass
intact to heirs
- an appeal to people with
substantial wealth
- a deduction applied against gift
or estate taxes
THE CHARITABLE GIFT
ANNUITY provides a gift to the
University of South Carolina and,
at the same time, an income fund
for the donor. In exchange for a gift
of property, marketable securities,
or cash, the University of South
Carolina will contractually guarantee
to pay you or another beneficiary a
specified annuity for life.
The typical donor:
- needs immediate income
- likes the simplicity of the
contract
- wants to provide a beneficiary
with tax-free income
- wants the greater income
this option provides for older
annuitants
The annuity features include:
- annual income for life based on
donor’s age
- immediate payment
- mix of ordinary, capital-gain
and tax-free income
- funding by cash, securities, or
(in some cases) other property
- moderate income-tax deduction
THE INSURANCE GIFT, with
the University of South Carolina Educational Foundation
being named as primary or
contingent beneficiary, is a
popular gift.
The typical donor:
- tends to be younger because
larger gifts are possible with a
modest premium
- tends to be older when a life
insurance policy is no longer
needed
The insurance gift features include:
- a charitable deduction for fair
market value if given during
one’s lifetime with premiums
deductible as cash gifts
- charitable deduction for
replacement value if paid-up
policy is donated in one’s lifetime
THE DEFERRED CHARITABLE
GIFT ANNUITY, similar to the
charitable gift annuity, combines
the benefits of making a gift to
the University of South Carolina
(property, marketable securities,
cash) and providing an income
fund for the donor. It appeals
to younger donors who wish to
supplement their income when
they reach a later age.
The typical donor:
- has no need for immediate
income
- likes the simplicity of the
contract
- wants a larger tax deduction
- makes several successive
contracts
- needs supplemental retirement
income
- contributes assets other than
cash
The annuity features include:
- income for life (a fixed
payment)
- payments that begin at a future,
specified date
- mix of ordinary, capital-gain,
and (possibly) tax-free income
- funding by cash, securities, or
(in some cases) other property
- income set by deferral period
and beneficiary’s life expectancy
- higher income-tax deduction
than if payments commenced
immediately
THE BEQUEST, one of the most
frequent forms of planned giving,
is fully tax-deductible and can help
reduce estate taxes in large estates.
In more modest estates, a donor can
make a larger gift than would have
been possible in one’s lifetime.
The typical donor:
- tends to be older but can be any
age
- wants flexibility so gift won’t
take effect during lifetime
- wants to determine how assets
will be used
The bequest features include:
full tax deduction
the option of specifying a sum,
asset, percentage, remainder,
contingency, or amount
governed by estate tax savings
The University of South Carolina
Office of Gift Planning
University Development
1600 Hampton Street, Suite 738
Columbia, SC 29208
Phone: (803) 777-4196
Fax: (803) 777-9708
Email: giftplan@mailbox.sc.edu
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