Center for Charitable Estate Planning
Planned Giving Options
Charitable contributions help you meet your philanthropic goals and extend your generosity into the future. But did you know that a planned gift can also protect your assets, provide for your family and guarantee you income for life? There are multiple options available to you.
By including Harding in your will, you make a difference in students’ lives while reducing estate taxes upon your death. A bequest is generally a revocable gift, which means it can be changed or modified at any time. You can choose to designate a bequest be used for a general or specific purpose so you can have the peace of mind knowing that your gift will be used as intended. Bequests are exempt from federal estate taxes. If you have a taxable estate, the estate tax charitable deduction may offset or eliminate estate taxes, resulting in a larger inheritance for your heirs.
There are a number of ways you can make a bequest to Harding University:
- Specific Bequest: A specific bequest involves making a gift of a specific asset such as real estate, a car, other property or a gift for a specific dollar amount. For example, you may wish to leave your home or $10,000 to Harding University.
- Percentage Bequest: Another kind of specific bequest involves leaving a specific percentage of your overall estate to charity. For example, you may wish to leave 10% of your estate to Harding University.
- Residual Bequest: A residual bequest is made from the balance of an estate after the will or trust has given away each of the specific bequests. A common residual bequest involves leaving a percentage of the residue of the estate to charity. For example, you may wish to leave 30% of the residue of your estate to Harding University.
- Contingent Bequest: A contingent bequest is made to charity only if the purpose of the primary bequest cannot be met. For example, you could leave specific property, such as a vacation home, to a relative, but the bequest language could provide that if the relative is not alive at the time of your death, the vacation home will go to Harding University.
If you are considering a bequest but would like to ensure that your bequest will be used for a specific purpose, please let us know. We would be happy to work with you and your attorney to help you identify ways to give and meet your charitable objectives. We will also work with you and your attorney to craft language to accomplish your goals.
If you are making a restricted bequest, we recommend that your attorney include the following provision to give Harding University flexibility should it no longer be possible for Harding University to use your gift as you originally intended:
If, in the judgment of the Board of Trustees, it shall become impossible for Harding University to use this bequest to accomplish the specific purposes of this bequest, Harding University may use the income and principal of this gift for such purpose or purposes as the Board determines is most closely related to the restricted purpose of my bequest.
If you include Harding University in your will or estate plan, consider using the Bequest Language provided and please complete the Estate Gift Confirmation Form. Contact us if you have any questions about how to make a bequest to Harding University or to request any additional information that might be helpful to you and your attorney as you consider making a bequest to us.
IRA Charitable Rollover
The IRA charitable rollover is a permanent provision in the tax code that allows individuals who are 70.5 years of age or older to make charitable gifts from their Individual Retirement Accounts (IRAs) directly to Harding University.
If you are 70.5 years old or older, you can take advantage of a simple way to benefit Harding and receive tax benefits in return. You can give up to $100,000 from your IRA directly to qualified charities such as Harding without having to pay income taxes on the money.
To execute an IRA charitable rollover, contact your IRA plan administrator to make a gift from your IRA to Harding. Please note that IRA charitable rollover gifts do not qualify for a charitable deduction. Please contact us if you wish for your gift to be used for a specific purpose.
Beneficiary Designation Gifts
A beneficiary designation gift is a simple and affordable way to make a gift to support Harding University. You can designate us as a beneficiary of a retirement, investment or bank account or your life insurance policy.
By making Harding the beneficiary, you continue to use your account as long as you need to. This simplifies your planning and avoids expensive legal fees. It also provides an estate tax charitable deduction and reduces the tax burden on your family.
To make your gift, contact your retirement broker, banker or insurance agent and ask them to send you a new beneficiary form. Complete the form, sign it and return it to your contact. After your passing, your account or insurance policy will be paid or transferred to Harding University, consistent with the beneficiary designation.
If you are interested in making a gift but are also concerned about your future needs, keep in mind that beneficiary designation gifts are among the most flexible of all charitable gifts. Even after you complete the beneficiary designation form, you can take distributions or withdrawals from your retirement, investment or bank account and continue to freely use your account. You can also change your mind at any time in the future for any reason, including if you have a loved one who needs your financial help.
See an example of Bequest Language to include in your will.
Charitable Gift Annuity
You may be tired of living at the mercy of the fluctuating stock and real estate markets. A charitable gift annuity is a gift made to Harding University that can provide you with a secure source of fixed payments for life.
With a charitable gift annuity, you transfer cash or property to Harding University. In exchange, we promise to pay fixed payments to you or your designate for life. The payment can be quite high depending on your age, and a portion of each payment may even be tax-free. You will receive a charitable income tax deduction for the gift portion of the annuity. You also receive satisfaction, knowing that you will be helping further our mission.
If you decide to fund your gift annuity with cash, a significant portion of the annuity payment will be tax-free. You may also make a gift of appreciated securities to fund a gift annuity and avoid a portion of the capital gains tax.
Charitable Remainder Unitrust
You may be concerned about the high cost of capital gains tax with the sale of an appreciated asset. Perhaps you recently sold property and are looking for a way to save on taxes this year and plan for retirement. A charitable remainder unitrust might offer the solutions you need!
With a charitable remainder unitrust, you will receive income for life, for a term of up to 20 years or life plus a term of up to 20 years. You also avoid capital gains taxes on the sale of your appreciated assets, and receive an immediate charitable income tax deduction for the charitable portion of the trust.
To set up a charitable remainder unitrust, you fund it through the transfer of cash or assets. In the case of a trust funded with appreciated assets, the trust will then sell the assets tax-free. The trust is invested to pay income to you or any other trust beneficiaries you select based on a life, lives, a term of up to 20 years or a life plus a term of up to 20 years. You receive an income tax deduction in the year you transfer assets to the trust. Harding benefits from what remains in the trust after all the trust payments have been made.
Charitable Lead Trust
If you are looking for a way to pass on some of your assets to your family while reducing or eliminating gift or estate taxes, a charitable lead trust is an excellent option.
With a charitable lead trust, you receive a gift or estate tax charitable deduction while passing inheritance on to family at a reduced or zero cost. You also establish a vehicle from which you can make annual gifts to charities of your choosing.
To set up a charitable lead trust, you make a contribution of your property to fund a trust that pays Harding University income for a number of years. You receive a gift or estate tax deduction at the time of your gift. After a period of time, your family receives the trust assets plus any additional growth in value.
Life Estate Reserved
You may desire to leave your home, farm or property to Harding University at your death but would also like to receive a current charitable income tax deduction. A life estate reserved might offer the solution you need.
With a life estate reserved, you receive a federal income tax deduction for the value of the remainder interest in your home or farm while preserving your lifetime use and control of your property. A life estate reserved creates a life estate based on more than one life. This will preserve the use of the property for you and a loved one, such as a spouse or dependent child.
To set up a life estate reserved, you deed your home or farm to Harding University. The deed will include a provision that gives you the right to use it for the rest of your life and that of any other life estate party named in the deed. You and Harding sign a maintenance, insurance and taxes (MIT) agreement to explain that you will do your best to keep the property in good condition and that you will maintain property insurance and pay the property taxes. When the owners of the life estate have passed away, your property will belong to Harding University. We will use or sell the property to further our mission.
If, at some point in the future, you are no longer able to live independently in your home, we may be able to help you use your life estate to create a lump sum cash payment (with a joint sale) or create an income stream (using the life estate to fund a charitable remainder trust or charitable gift annuity).