Planned Gifts
Planned giving involves the irrevocable transfer of an asset to Morehouse College and it can be a very attractive giving strategy for many donors. Typically, a gift of highly appreciated assets is made while the donor retains the income from those assets for his or her lifetime.
Bargain Sale: A partial gift/partial sale may be made to Morehouse College by contracting to sell an asset for less than full and adequate consideration. In this instance, a donor contracts with the trustees of Morehouse College to sell an asset for less than its appraised value. Any portion of the sale over basis is subject to capital gain tax, while that portion of the transaction over the sales price but less than the fair market value price is available as a gift to charity.
Bequests: A bequest is a gift that a donor makes to Morehouse College in his or her will or trust. The donor can decide on the terms by which the bequest will be paid, and the donor's survivors should receive an estate tax deduction for the value of the charitable gift. This is the simplest way to make a planned gift.
Charitable Gift Annuities: A charitable gift annuity is a contractual agreement between Morehouse College and a donor. In this circumstance, the donor transfers money or property to the College in exchange for a promise to pay an annuity to the donor or to other named beneficiaries for a specified period of time.
Charitable Lead Trust: When a donor establishes a charitable lead trust, Morehouse College receives income from assets for a period of time, and the assets are transferred either back to the donor or to his or her children or grandchildren at the end of the specified gift period. This can be a significant estate and gift tax planning technique in transferring substantial assets to children and grandchildren. This technique is especially attractive in transferring assets which are currently undervalued due to market pressures, but which have significant appreciation value. Creating a charitable lead trust necessitates an understanding of split interest deduction rules and related tax implications, and therefore the donor should seek professional advice.
Charitable Remainder Trust: A charitable remainder trust is established either during the life of a donor or through the donor's will. In this circumstance, the donor names a trustee or investment advisor in a charitable remainder trust and assets are transferred to the trust. When the assets are sold, capital gain taxes are avoided, and a specified percentage of income is paid out of the trust. The donor receives a charitable income tax deduction in the year of the transfer based on the age of the donor and the gift amount. This type of gift can be a dynamic financial planning tool for the donor because of the significant tax and cash benefits to the donor and Morehouse College.
Life Insurance: A donor may name Morehouse College as the beneficiary of a life insurance policy, designating the proceeds to be paid to the College upon the death of the insured. A donor may also buy a policy for the benefit of the College and name the College as the beneficiary. Policies can be written that provide an income tax deduction for the premiums paid, as well as an estate tax deduction for the proceeds paid.
Remainder Interest in a Residence or Parcel of Land: This technique allows a substantial gift to be made to Morehouse College at the death of a donor (or a donor and spouse) by gifting the remainder interest in a real estate property after the donor's (or donors') death. This technique can result in a sizable income tax deduction while assuring the donor use of the property for life.
For more information on Planned Giving:
Kathleen Johnson
Executive Assistant to the President,
Capital Campaign
(404) 215-3478
kljohnso@morehouse.edu
Please Note: As Morehouse College prepares to meet the challenges of the 21st century, we know that the generosity of alumni and friends of the College will make the difference in our success. We want to ensure that our donors benefit from making a gift to Morehouse, and there are many ways to give that can improve a donor's financial and tax situation. While employees and representatives of the College may not provide specific tax or legal advice to donors or prospective donors, the staff in the Office of Institutional Advancement may provide general non-binding information regarding potential tax and legal implications of proposed gifts. We also recommend that you seek professional legal and/or tax consultation as needed.
