Planned gifts
Trends in philanthropy show that more and more contributors are opting for planned giving donations to the University of Houston. Through planned gifts, a donor arranges a gift to the university for realized benefit in the future.
A contributor to UH may find that planned giving offers attractive benefits. It can increase current income for the donor, reduce the donor's income tax and avoid capital gains tax and pass assets to family at a reduced tax cost, while offering a significant donation to the university.
The Office of Major Gifts and Planned Giving can be a resource for donors and their financial advisors in a careful evaluation of these types of plans. Our professional staff can provide details on the ideal gift structure that will accomplish individual goals and achieve the most optimal benefit.
Donors who have included the university in their estates through planned gifts are recognized through The 1927 Society, a distinguished group of benefactors. Please click on The 1927 Society section for more information.
For further information about planned gifts, please contact Lynn Mason at 713-743-4351 or e-mail at lmason@uh.edu . For more planned giving resources available to UH donors, please visit the Creating Futures Web site.
Gifts by Will (Bequests)
Gifts associated with a will and the final distribution of an estate offer donors and the university a great deal of potential. A bequest, or gift by will, is an attractive option when a donor is currently unable to make an outright gift, but wishes to make a contribution to UH in a meaningful way.
A specific bequest will involve donating a set amount or percentage of assets from an estate to the university. Residual bequests are left to the university after all debts, expenses, and taxes have been paid from an estate.
Living Trusts
A trust is a legal agreement that specifies how the assets placed under the trust will be managed. A living trust can be established to take effect during a donor's lifetime.
Benefits include possible savings in estate taxes if a charity is the beneficiary of the trust remainder. Also, the terms of the trust can be changed at any time.
Retirement Plan Assets
A qualified retirement plan remains one of the most ideal ways to accumulate wealth and a secure future. Yet, this may be an ineffective way of transferring wealth or preserving assets after a lifetime. A large portion of assets from a qualified retirement plan, such as profit sharing, a 401(k), a 403(b) or an IRA, can be exposed to taxation of up to 75 percent.
Income and estate taxes can be reduced through a charitable gift of retirement plan assets. A donor can choose the most ideal type of planned giving arrangement for transferring the balance on an account to the University of Houston.
Some of the possibilities include naming the Bauer College of Business at the University of Houston as the beneficiary of retirement assets through the plan administrator. A benefactor also can transfer retirement assets at death to a tax-exempt deferred giving plan, such as a charitable remainder unitrust or a charitable remainder annuity trust.
Insurance
The procedure for donating a life insurance policy is simple and is a popular way to give with little expenditure. Whole life insurance can be offered by naming the Bauer College of Business at the University of Houston as the irrevocable owner and beneficiary.
The policy can either be paid up or, if not, should follow these criteria as of the date of the gift:
Minimum face value of $100,000 Payment schedule not to exceed ten years.
Assumes an interest rate not to exceed 2 percent below the prime interest rate as of the effective date of the policy.
Charitable contributions from the donor to the university in the amount of any premiums may be required with gifts of life insurance policies.
Charitable Remainder Trusts
Donors often choose the charitable remainder trust as a way to achieve a variety of financial goals while making a significant gift to UH. (A trust is a legal agreement that specifies how the assets placed under the trust will be managed.)
Through a charitable remainder trust, a donor can contribute assets to the trust and receive a life income. The remaining principal will go to the charity, specifically the Bauer College of Business at the University of Houston.
There are two types of charitable remainder trusts-the unitrust and the annuity trust. Under a unitrust, annual income to the donor is paid as a fixed percentage of the fair market value of the assets. Under the annuity trust, the donor receives annual income as a fixed payment equaling at least 5 percent of the value of the asset at the time the deferred-giving agreement is signed.
The advantages of establishing a charitable remainder trust include an income stream for life, avoidance of taxes on capital gains for appreciated securities or real estate, and reduction of estate taxes, a charitable contribution income tax deduction based on life expectancy.
Charitable Lead Trusts
The exact reverse of a charitable remainder trust, this type of deferred gift offers a charity, specifically the Bauer College of Business at the University of Houston, an income for a period of time after which individual beneficiaries receive the remainder of the trust.
Creating a charitable lead trust will allow a donor to share surplus income with the university, then pass the principal to family at greatly reduced gift and estate taxes. The donor may also opt to retain the asset after the term of the income stream is completed.
Gift Annuities
A popular way of establishing an immediate or deferred gift annuity is to make a gift of cash or appreciated securities to the University of Houston Foundation (UHF) with a minimum of $10,000. The donor is paid by the UHF a guaranteed fixed percentage of the value of the gift quarterly for the lives of two annuitants, who must be at least 50 years of age.
All immediate and deferred gift annuity contracts benefiting the University of Houston will be initiated between the UHF and each individual annuitant. Per each gift annuity agreement, the UHF is responsible for the management of all assets contributed. Your return is backed by the full faith and credit of the UHF and is guaranteed for life. Recommended annuity rates are based on the age of the annuitant. PGCalc provides a table of American Council on Gift Annuities' suggested maximum payout rates for gift annuities. Please click here to view our annuity rates.
The UH charitable gift annuity offers several advantages, including guaranteed fixed payments for life and a charitable tax deduction for the gift. Also, if funded with appreciated securities, capital gains taxes are reportable over the donor's lifetime. Gifts made are permanently removed from the donor's estate for estate tax calculation purposes.