Planned gifts provide donors with excellent benefits, which may include life income, future continued use of gift property, an avoidance of capital gains tax and immediate income tax deduction. Some planned gifts, such as bequests, provide primarily gift and estate tax savings.

To discuss planned gift opportunities, please contact Keith Inman, vice president for University Advancement, at 502-852-7768 or Theresa Raidy, associate vice president for development for the Health Sciences Center campus, at 502-852-2386. To receive "Guide to Giving," a publication that explains the many planned giving opportunities, contact Margaret Feldman, 502-852-6478.

Here are some of the ways planned or deferred giving may allow you to increase your retirement income would be through benefits from donated assets, a trust or bequest:

• Charitable gift annuity
• Deferred gift annuity
• Charitable trust
• Charitable lead trust
• Real estate
• Bequest
• Life insurance
• Retirement assets
• IRA rollover
• Include UofL in your Will
• Learn more about Planned Giving

Charitable Gift Annuity

Charitable gift annuities are a great way to increase your retirement income while supporting the scholarship, research area or program of your choice at the University of Louisville.

What is a gift annuity?

A charitable gift annuity is a contract under which you choose to make a gift of cash, securities or other assets to the University of Louisville Foundation. In exchange, the UofL Foundation guarantees you a fixed income each year for the remainder of your life and/or the life of another person you designate. At the end of the agreement, the funds are made available to the area of your choice at the University of Louisville.

A charitable gift annuity is particularly attractive because rates are fixed and do not fluctuate with the stock market. Also, annuity payments are treated as part tax-free income, part capital-gain and part ordinary income, making the effective rate of return even higher. Charitable gift annuities are the most popular form of planned gifts.

What are the benefits of gift annuities?

Charitable gift annuities offer a number of benefits, including:

• Guaranteed income for life for up to two individuals
• Charitable tax deduction for a portion of your gift
• Ability to increase your income from a low-yield asset
• Portion of annuity payments treated as tax-free income
• Satisfaction that your gift benefits UofL

Turning CDs into gift annuities

Although cash and securities are popular assets for funding charitable gift annuities, certifi¬cates of deposit that are close to maturity are worth considering, also. Doing so will allow you to exchange the low rate paid by the CD for a higher gift annuity rate and to receive the other benefits outlined in this brochure. Talk to your tax adviser or call our Planned Giving Office to discuss these opportunities.

Gift annuity example

John and Abigail Smith, ages 70 and 71, own $100,000 in securities they have held over a year, which yield $2,000, or 2 per¬cent, in annual dividends.

The Smiths purchased their securities for $50,000 many years ago. If they sold the securities, they would need to pay a 15 percent capital gains tax on the gain of $50,000, or $7,500.

Instead, the Smiths decide to give the securities to UofL to fund a charitable gift annuity with the full value of $100,000. At a 5.2 percent rate of return, based on their age, they will receive:

• Annual Benefits: A guaranteed fixed income of $5,200 each year for their lifetime ($1,232 tax-free portion; $2,403 capital gains and $1,565 ordinary income).
• Current Benefits: A charitable tax deduction of $26,967.
• Future Benefits: Estate tax advantages and support of their favorite UofL programs.

Gift annuity rates

Charitable gift annuity rates vary depending on the age of the person receiving lifetime income payments.

In the samples listed below not every age or age combination is listed.

One Beneficiary
Age - Annuity Rate

60 - 5.0 percent
65 - 5.3 percent
70 - 5.7 percent
75 - 6.3 percent
80 - 7.1 percent
82 - 7.5 percent
85 - 8.1 percent
89 - 9.2 percent

Two Beneficiaries
Age - Annuity Rate

65 & 68 - 5.0 percent
70 & 72 - 5.3 percent
72 & 75 - 5.4 percent
80 & 87 - 6.6 percent
82 & 86 - 6.7 percent
84 & 86 - 7.0 percen
89 & 90 - 8.1 percent

Deferred Gift Annuity

With a deferred gift annuity, you will begin receiving payments at a future time, a date chosen by you the donor. Deferred gift annuities, as with immediate annuities, are attractive to persons looking to supplement future retirement income.

Charitable Trust

1. Charitable Remainder Unitrusts - You place assets in a trust, and you (and/or another beneficiary) receive lifetime income from it, then UofL receives the remainder. Charitable remainder unitrusts provide a variable income for life.

For example: Beth Johnson, age 60, has $100,000 worth of stock that pays two percent dividend, or $2,000 annually.

She decides to transfer the stock into a charitable remainder unitrust, naming UofL the beneficiary. She elects to receive quarterly payments at five percent of the unitrust's assets as determined annually. She will receive:

Annual Benefit: A payout of five percent of the determined value of the trust as estimated annually. The first year's income will be $5,000, five percent of $100,000.

Future Benefits: Estate tax advantages and support of her favorite programs at UofL.

2. Charitable Remainder Annuity Trusts - The trust pays fixed income for life and provides an immediate income tax deduction. For example, if a donor is disappointed in the yield from a current investment in the stock and bond markets yet wants to avoid capital gains tax should he sell, a charitable remainder annuity trust may be the answer.
This plan will pay the donor annually the same dollar amount he chooses at the outset. The income payments are fixed, based on the starting valuation. Then, after the donor's lifetime (and that of the surviving beneficiary, if desired), the trust remainder is available to support the university's mission.

Charitable Lead Trust

A charitable lead trust may allow you to pass assets to you family with significant estate tax savings while at the same time making a gift to UofL. After the university receives income from assets in the trust for a period of years, the principal goes to your family, with estate or gift taxes usually reduced or even eliminated.

Real Estate

By donating property to UofL, you may avoid capital gains tax on the sale of a home or other real estate. In addition, your gift is tax deductible for the market value of your property.

Bequest

UofL may be named as the beneficiary through a will or bequest to receive: 1) gifts of property, real or personal; 2) a gift of a stated amount of money; or 3) a percentage of the remaining estate after other gifts have been made. By naming UofL in your will, you can avoid estate taxes on the amount designated to the university.

Life Insurance

A gift of life insurance can benefit you and the university in many ways. If you name UofL as owner, you can receive an income tax deduction for approximately the cash value of the policy. If you name UofL as beneficiary you will receive an estate tax charitable deduction. Naming UofL as contingent beneficiary allows your family added security.

Retirement Assets

Retirement assets left to your spouse or family members are subject to income and estate taxes. You may avoid or reduce income and estate taxes on IRA's or other employee benefit plans by naming UofL as beneficiary of your retirement assets.

IRA Rollovers

In October 2008, Congress passed into law the Emergency Economic Stabilization Act. The law contains an IRA rollover provision which allows donors age 70 ½ or older to exclude from gross income distributions to charity of up to $100,000 from traditional individual retirement accounts (IRAs) and Roth IRAs. The provision is in effect for tax years 2008 and 2009. Learn more

How to include UofL in Your Will

We encourage you to talk with Keith Inman or Theresa Raidy and consult your attorney.
For a general gift to UofL, we suggest language as shown below to be included in your will:
'I hereby bequeath to the University of Louisville Foundation Inc., a nonprofit corporation in Louisville, Ky., ________ percent of the rest, residue and remainder of my estate for the general benefit of the University of Louisville.

Learn more

To learn more about charitable gift annuities and other planned gift opportunities, please contact Keith Inman, vice president for University Advancement, at 502-852-7768 or Theresa Raidy, associate vice president for development for the Health Sciences Center campus, at 502-852-2386. To receive "Guide to Giving," a publication that explains the many planned giving opportunities, contact Margaret Feldman, 502-852-6478.