Planned or Deferred Gifts
Planned of deferred gifts are those that involve estate and tax planning. However, they can also provide significant tax relief and income for the donor, as well as long-range benefits for Pitt-Bradford. The following are only brief suggestions for making deferred or planned gifts. You should seek professional financial advice to determine the most beneficial plan for you.
Closely held stock
People who own sizable blocks of stock in closely held corporations are strategically positioned to give while enjoying tax and stock benefits. When you give such stock to Pitt-Bradford (without reducing ownership to 50 percent or less), Pitt-Bradford can sell the stock to your corporation, which uses its retained earnings to purchase shares. The results of this transaction are:
- no capital gains
- an income tax deduction for the shareholder
- no capital gain to the charitable organization
- no second tax when the accumulated earnings are distributed
- the donor maintains control of the corporation
There are a number of ways to give to Pitt-Bradford that provide you with an income for life. How do these income-producing plans work? Simply put, you guarantee a gift to Pitt-Bradford in the future and in return you receive an income for life plus valuable tax savings.
A unitrust, also known as a charitable remainder trust, gives you the opportunity to create your own investment program. You establish a unitrust to provide yourself payment for life. The amount your receive is a set percentage of the current value of the unitrust, determined annually. After your lifetime, the principal of your trust goes to Pitt-Bradford. The unitrust can be funded with cash, securities or real estate. To encourage your philanthropy the federal government provides you with generous tax benefits.
The annuity trust
If you would like to receive a fixed and certain dollar income from your own separate trust for life, you can do it with a charitable remainder annuity trust. This is a trust you create to pay yourself a known annual payment that is at least 5 percent of the initial fair market value of the trust assets. The annuity trust can be funded with cash or securities (or both). Like the unitrust you are entitled to some very desirable tax benefits when you establish the annuity trust.
Pooled life income fund
The university’s pooled income fund is an investment tool that combines the deferred gifts of many donors and pays the individual beneficiaries their proportionate share of all the income earned. You make a gift that is added to the fund for investment and managed along with the other gifts. Each year you receive a pro rata share of the fund’s net earnings for that year. When you itemize the gift on your federal tax return, you also benefit from a sizable charitable contribution for the year of your gift. After your lifetime (or the lifetime of another beneficiary you have named), the value of your units in the fund becomes available to support Pitt-Bradford.
Gift charitable annuity
The charitable gift annuity is one of the easiest and most popular methods of making a planned charitable gift of cash or readily marketable securities to Pitt-Bradford. The University promises to pay you a fixed dollar amount when you make an irrevocable gift. The amount is determined by your age at the time of the contribution. You may be, but do not have to be, one of the (up to two) annuitants. You realize benefits almost immediately. If you itemize deductions, you can take a charitable deduction for part of the value of your gift when you file that year’s income tax return.
Deferred payment gift annuity
Instead of securing an immediate payment under a gift annuity, you can have it deferred until a later date. Similar to the charitable gift annuity, you make a contribution now, securing a current income tax deduction. Then you select the date to begin receiving your guaranteed life income. For many people, tax reform curtailed the tax benefits of IRAs, 401(k) plans, and other retirement plans. The deferred payment gift annuity is a good way to make up the loss of the future income you will need.
Wills and bequests
One of the most common ways of making a planned gift is by making a bequest in your will. Your will should be prepared by an attorney and executed according to strict guidelines. Having a will gives you several advantages:
- You can provide for special needs of your spouse, children or other relatives.
- You can take full advantage of estate tax savings by creating trusts.
- You can hand-pick your executor.
- You can include Pitt-Bradford in your will. Your generosity not only supports Pitt-Bradford, but also helps you save taxes.
The provisions in your will for making a gift to the Bradford Educational Foundation to benefit the University of Pittsburgh at Bradford will depend on the type of gift and your own circumstances. Perhaps these model provisions will be helpful to your attorney:
I give to the Bradford Educational Foundation, a nonprofit, tax-exempt foundation established solely to support the University of Pittsburgh at Bradford, PA, the sum of $_____ for its general purposes.
Gift for a Special Purpose
I give to the Bradford Educational Foundation, a nonprofit, tax-exempt foundation established solely to support the University of Pittsburgh at Bradford, PA, the sum of $_____ to be used for _____________________ (specify the purpose).
It is a simple matter to include a bequest to Pitt-Bradford in your will directly or in a codicil. For more information call the Institutional Advancement Office (814-362-5091)
There are several other ways to make a deferred gift to Pitt-Bradford including establishing a charitable lead trust, creating a living trust, making a gift of life insurance, donating real estate or selling property to the University through a bargain sale. For more information, request our Planned Giving guide or call the Institutional Advancement Office.
Note. Please note the information on this web site is not intended as legal advice. As with all financial decisions, your philanthropy requires careful planning. We encourage you to consult with your attorney and financial advisers as you make estate plans. We will be happy to work with you and your financial and legal advisers on the method of giving that is best for you.