Transcript How Funds Are Raised - Lincoln Memorial University

Planned Giving
What Is a Planned Gift?
While Annual gifts and Major gifts are given
“outright”, Planned gifts are established in a way
that is typically fulfilled after a term of years or
following the passing of one or more individuals.
What Defines a Planned Gift at LMU?
A planned gift to LMU is a gift designating LMU
as the beneficiary (or one of the beneficiaries).
A planned gift may be made either as a
revocable or irrevocable gift, and each type has
different advantages and implications for both
the donor and LMU.
What Do Planned Gifts Fund at LMU?
Just like Major gifts, Planned gifts fund:
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Capital Projects such as new residence halls
New technology for classrooms
Endowed academic chairs
Endowed academic scholarships
Endowed faculty development funds
Many other areas!
What is the Process that Leads to a Planned Gift?
3. Work with University
Advancement at LMU to
initiate your gift
2. Consult with
your tax advisor
1. Identify Values and
Giving Priorities
Ask yourself: “What kind of giving plan is
best for my specific situation?”
Ask yourself: “What programs or facilities
do I want to support at LMU?”
Part I: The “Revocable” Planned Gift
A revocable gift, such as a will provision, designates
LMU as the beneficiary of an estate, trust or other
instrument.
Advantages: Can be changed or revoked at any time
by the donor
Disadvantages: Does not provide immediate tax
benefits for the donor, and may incur legal fees
Types of Revocable Planned Gifs
1. The Will Provision
 A will is a legal document directing the distribution
of your assets at your passing
 Making a bequest to LMU can simply be through a
clause added to an existing will
 Many people decide to bequeath a percentage of
their assets, rather than a specific dollar amount
 Did you know over 50 percent of Americans do not
have a will? Do you?
Types of Revocable Planned Gifts
2. The Revocable Living Trust
 A Trust is a giving instrument in which funds are invested,
managed and dispersed by a trustee according to the
wishes of the donor
 A revocable trust may be altered at any time
 Because of this, it offers greater flexibility for the donor
but may also be subject to taxation
 A living trust offers greater privacy than a will (which is
public record)
Other Types of Revocable Planned Gifts
3. Insurance and IRA Beneficiary Designations
 Many people name LMU as the beneficiary of an
insurance policy or a retirement fund
 Recent tax law changes provide additional benefits
for charitable IRA retirement rollover gifts
 As always, it’s important to consult your tax
professional for guidance in your specific situation
Summary of Revocable Planned Gifts
 Revocable gifts are flexible - they can be changed at
any time
 A revocable gift does not transfer assets until the
death of the donor (or other condition). Because of
this, there is no immediate tax deduction
 A revocable giving instrument like a living trust can
protect your wishes and often avoids probate
Part II: The Irrevocable Planned Gift
 Unlike a revocable gift, an irrevocable gift
represents an immediate transfer of assets
using a variety of methods
 Because of this, there is an immediate
charitable tax deduction for the donor
 There are several ways to make an irrevocable
planned gift to LMU:
1. The Charitable Gift Annuity
A Charitable Gift Annuity, or CGA, is a popular and powerful way
to support LMU
 A gift annuity is a contract between LMU and a donor, in which
LMU agrees to pay a fixed amount in exchange for a transfer of
cash or other property
 A CGA’s annuity payments are guaranteed, no matter how the
stock market performs
 A two-life CGA may pass to one additional person before being
ultimately distributed to LMU
 A CGA provides an immediate tax deduction based on the
“remainder” interest at the end of the annuity’s life
2. The Irrevocable Trust
Some donors choose to establish more elaborate giving
arrangements that provide for additional family members and/or
multiple charities. While there are many variations of irrevocable
trusts, the most common categories are outlined here.
 Trusts can be funded by cash, stock, real estate or other assets
 Since they are irrevocable gifts, they provide an immediate tax deduction,
and they also allow the transfer of assets to bypass capital gains taxes
 Some trusts can provide for up to eight persons before ultimately being
distributed to LMU or other charities
 Trusts offer privacy for an estate, and pass directly to beneficiaries without
probate
Charitable Remainder Trusts
Two popular types of irrevocable trust are the CRAT (Charitable
Remainder Annuity Trust) and CRUT (Charitable Remainder
Unitrust)
 The CRAT makes a fixed annuity payment, while the CRUT
returns a percentage of total assets within the trust
 Both types of trusts can provide for multiple beneficiaries with
many levels of flexibility
 Both types of trusts offer an immediate tax deduction, and
bypass capital gains taxes
Charitable Lead Trust
The “reverse” of a Charitable Remainder Trust:
 A Lead Trust makes payments to charity during the trust’s term
with the remainder passing to the donor or another beneficiary
 Like a remainder trust, the lead trust offers an immediate tax
deduction and bypasses capital gains taxes.
Is a Planned Gift Right For You?
Every gift to LMU is ultimately about supporting the mission of
LMU and helping our students achieve success. Planned giving
provides donors with a way to make a substantial gift to LMU in
a way they might not otherwise have been able to do. Is a
planned gift right for you? Contact the Division of University
Advancement to find out more about planned giving today!