You can make a significant gift to UM-Dearborn to address some of the world's most pressing issues through cutting-edge research and the education of tomorrow's leaders—and gain financial and tax benefits for you and your family. You can designate your gift to a specific college, department or program, to support faculty support or student scholarships. Or it may be unrestricted and used where needed most in the school. Carefully planning your gift to the university may stretch the value of your donation, enabling you to do much more than you think possible.
Several types of gifts first pay income to you and your family and then help UM-Dearborn. These gifts also can enable you to dispose of illiquid assets in exchange for income and tax benefits. The lead trust is a gift arrangement that can help you transfer wealth to the next generation in a tax-efficient manner.
Visit https://plannedgiving.umich.edu/ to learn more about creating your legacy at U-M.
Click here for bequest language to share with your attorney to add to your will or trust.
Here are a few options for gifts:
Publicly traded stocks or bonds make excellent gifts and can be easily transferred to UM-Dearborn. If the securities have appreciated, you not only receive the benefit of the full fair market value as a charitable income tax deduction, but you also avoid the capital gains tax if you have owned the securities for more than one year.
A gift to UM-Dearborn of appreciated stock held for more than one year may provide you with significant benefits, including:
- An income tax deduction for the fair market value of stock (top federal rate 39.6%)
- The elimination of capital gains taxes due if the stock were sold instead (top federal rate 23.8%)
A charitable bequest in a will or trust stipulates that a specific amount, a percentage or the remainder of your estate be given to the university after your lifetime. Gifts from your estate to support UM-Dearborn are exempt from estate tax.
Life-income gifts provide income to a donor and/or another individual, such as a spouse. The donor realizes income tax savings for the year in which the gift is given to the university. A charitable gift annuity, for example, provides a guaranteed income for a spouse or other loved one, and a deferred income gift annuity provides you with additional retirement income. At the end of the beneficiary’s lifetime, the remainder is transferred to UM-Dearborn.
Retirement fund assets are heavily taxed if given to an individual; however, you may designate UM-Dearborn as a beneficiary of a specific amount, a percentage or the remainder of your retirement assets. Gifts from your retirement fund are exempt from estate tax.
- Tax-Free IRA Rollover Permanently Extended
The Setting Every Community Up for Retirement (or SECURE) Act became effective on January 1, and it could certainly affect many of your clients who are retirement savers. The SECURE Act allows for individuals to contribute to their traditional IRAs without any age restriction. An age restriction on when required minimum distributions (RMDs) must begin was raised from age 70½ to 72. However, the new rule does not apply to those individuals born on or before June 30, 1949.
The SECURE Act revives the opportunity for qualified donors to make outright gifts of up to $100,000 to UM-Dearborn from their IRA. Such transfers avoid tax on the distribution to UM-Dearborn and count toward your required minimum distribution (RMD). This is a permanent change, so donors may take advantage at any time in the coming years.
Life insurance, in the form of an old policy no longer needed by the original beneficiary or a newly created policy to benefit and can be an investment in the university. Small premiums now may generate a major gift in the future, and premiums for these policies often are tax deductible. Many employers provide group life insurance as a benefit, and UM-Dearborn may be named for a portion of proceeds.
Charitable lead trusts provide income to UM-Dearborn over a set number of years and then transfer assets to children or other individual(s) named by the donor. This plan enables heirs to receive assets while minimizing taxes.
For more information, contact Michelle Fallscheer, Senior Director of Leadership and Planned Giving, 313-436-9182, firstname.lastname@example.org.