2009 Foundation Annual Report - University Blogs - Missouri State ...

Gifts of Retirement Plan Assets — ByGifts That Pay Income — There are anaming Missouri State University asnumber of ways for you to make a giftsurvivor beneficiary of your qualifiedto the University that will pay income.retirement plan, you can greatly reduceSuch a gift will pay benefits back toyour estate’s overall tax burden andyou, either for your entire life or for aincrease the amount passing to yourspecified number of years, after whichchildren or heirs. Because retirementthe University will use the remainingplan assets are subject to multiple layersgift assets for the purpose you specify.of taxation at the owner’s death, in theA life-income gift may be worthwhileform of federal and state estate tax asif you want to make a gift but needwell as income tax, retirement assets areto retain or increase the incometaxed much more heavily than otheryou receive from your assets. It canestate assets. If left to a non-spouse,be especially attractive if you owntaxes can claim in excess of 75% of alow-yielding but highly appreciatedplan’s accumulations.securities, and want to increase yourGifts of Life Insurance — Whenproperly arranged, life insurance offersan attractive way to leverage relativelylow premium payments to make amajor gift to the University. If you nolonger need all the life insurance thatyou own, you may want to name theUniversity as a beneficiary or contingentbeneficiary. Any benefit the Universityreceives from your insurance will beexcluded from your taxable estate.By taking the additional step ofnaming the University as irrevocablebeneficiary and owner of your lifeinsurance policy, you obtain an incometax charitable deduction equivalent toeither the policy’s cash surrender valueor replacement value. If additionalpremium payments are due, you candeduct those premiums as charitablecontributions each year.Gifts Through a Will or Living Trust —Your bequest to the University or anyof its colleges through your will orliving trust can take any of a numberof forms. You can bequeath a specificdollar amount, or a portion of whatremains after your obligations to othersare fulfilled. You can designate yourbequest to support the Universityas a whole, or a specific college, orprogram. Through your bequest, youcan establish a permanent, namedfund for scholarships, program support,professorships or the like.Please contact us for draft languageto ensure that the University andits colleges and programs will fulfillyour wishes as you intend. We canalso provide information about estateplanning and the benefits of naming theUniversity in your will.However, careful planning for thedisposition of retirement plan assetswill avoid unnecessary tax costs. Bynaming a qualifying charity suchas Missouri State University as asurvivor beneficiary of your retirementassets, the gift becomes completelyexempt from estate tax, income taxand generation-skipping transfer tax,permitting you to make your gift atvery low actual cost to your heirs. Ifyou intend to leave a legacy to MissouriState University or another qualifiedcharity through your will, prudentplanning might call for you to makeyour gift from retirement plan assetsinstead, leaving the lesser-taxed assetsto your family.income while avoiding capital gainstaxes. And you also obtain a substantialincome tax charitable deduction whenyou make your gift.The various types of life-incomegifts that are available permit you tofashion a gift arrangement that best fitsyour financial needs. You can structureyour life-income gift to pay income toyourself and another person or persons.Your gift can pay a fixed or variableincome; it may include tax-free incomein whole or part; and you can arrangefor the income payments to commenceimmediately or at a future date, such asthe date of your planned retirement.A charitable life-income plan can alsomaximize your family’s income fromthe survivors’ benefits of your qualifiedretirement plan. You can designate acharitable life-income plan as survivor34.2009 Annual Report Missouri State University Foundation 35.