Planned Giving Questions and Answers
“The Ave Maria School of Law Department of Development and External Affairs benefits greatly from the volunteer support of the Planned Giving Council – a group of prominent Naples industry experts that give of their time to advise the Department on critical best practice and other technical questions. The current members of the Planned Giving Council are: William M. Burke, Attorney and Shareholder at Coleman, Yovanovich & Koester, PA; Daniel C. Hickey, Senior Vice President at The Northern Trust; Gregory T. Holtz, CTFA, Senior Vice President and Managing Director at The Private Client Reserve of U.S. Bank; Mitch McLendon, CFP®, CFM , CRPC®, Wealth Management Advisor, First Vice President at The McLendon Group of Merrill Lynch; Alfred J. Stashis, Jr. , Attorney and Shareholder at Dunwody White & Landon, P.A.”
Planned Giving Questions and Answers
From time to time supporters inquire about ways to give deferred gifts to Ave Maria School of Law. Sometimes they are looking for ways to contribute through their wills or insurance policies, or retirement assets. And sometimes they are looking for ways to donate that will actually provide themselves with income during their lifetime. In recent years this has become a very popular way for donors to make charitable contributions.
Planned giving provides you with creative ways of giving that may also help you meet your other financial objectives. Planned gifts can reduce current income taxes through a charitable deduction, increase retirement income through a retained income stream, and address your financial obligations while providing assistance to the Law School.
The Planned Giving Questions and Answers that follow will provide you with essential information to help you determine whether or not you should consider a planned gift to Ave Maria School of Law.
Q . What exactly is “planned giving?”
A . All charitable gifts are planned to some extent, but “planned giving,” or as it is sometimes called “charitable gift planning”, refers to the process of making a charitable gift of one’s estate assets to a nonprofit organization such as a charity or educational institution, that requires careful consideration and planning in light of the donor’s overall financial and estate plan.
Planned giving used to be referred to as “deferred giving” because planned gifts are usually deferred, meaning they are arranged now and fulfilled later. For example, a person could include a provision in his or her will to make a bequest to Ave Maria School of Law. That arrangement would be considered a “planned” gift.
Q . Why should people consider a bequest gift to the Law School, and how would they go about this?
A . For some donors, giving to Ave Maria School of Law through their will is an excellent way of leaving a lasting legacy of Christian stewardship that benefits the Law School and the whole Catholic Church. It can also benefit the donor’s estate as well by reducing the size of the taxable estate. And setting up a bequest gift is fairly simple. A donor can make a bequest by including the following language in their will:
“I give and devise to Ave Maria School of Law all (or you may state a percentage or exact amount) of the rest, residue and remainder of my estate, both real and personal, to be held, administered, and used by the Board of Governors for the unrestricted support of Ave Maria School of Law.”
Q . What about retirement assets? Are these assets ever considered in planned giving?
A . Definitely. And it’s very important for a donor with retirement assets to consider this option. Retirement account assets, if left to anyone other than a spouse, may be subject to very high taxation. An important fact to remember about the assets of a qualified retirement plan is that the entire amount is subject to income tax when received by the heirs. Since qualified retirement plans are included in a decedent’s taxable estate, this could actually expose the assets of a qualified retirement plan to double taxation – estate and income taxes, potentially reducing the bequest by 65 percent or more of its value.
By designating Ave Maria School of Law as the recipient of any benefits remaining in a qualified retirement plan, these assets are removed from the taxable estate, and of course, are not exposed to income tax. Other assets, not subject to income tax, such as cash or securities, are better choices as bequests to heirs.
Q . What can you tell us about the so-called income-producing gifts?
A . Many donors seek gift arrangements that enable them to give to the Law School while providing ongoing financial support for themselves or others. There are many gift options of this type. The Charitable Remainder Trust is one of the most popular and it has the advantage of transforming low-yielding assets into a steady stream of secure income during the donor’s and spouse’s lives. The donor also benefits by avoiding capital gains on the sale of the asset, as the trust accomplishes the sale. And since the trust is irrevocably designated to benefit Ave Maria School of Law, the donor receives a partial charitable tax deduction upon the establishment and funding of the trust.
A donor may create a Charitable Remainder Trust by transferring cash, securities, and/or property to a trust for the Law School’s benefit.
Q . How do I go about setting up planned gift for Ave Maria School of Law?
A . Please contact:
Donna C. Heiser
Chief Advancement & Communications Officer
Ave Maria School of Law
1025 Commons Circle
Naples, FL 34119
Phone (239) 687-5402
Please Consult Your Financial Advisor
Ave Maria School of Law is not engaged in rendering legal or tax advisory service. There are dozens of planned giving arrangements available. The few examples listed above are intended to provide useful information of a general character only. For advice and assistance in specific cases, the services of a qualified financial advisor or attorney should be obtained. State law governs wills, trusts, and estates and charitable gifts made in a contractual agreement. Advice from legal counsel should be sought when considering these types of contracts.