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Advancement: Your Connection to Union

The Benefits of Planning a Gift

Dr. John Wagner

Dr. John Wagner

When Union College President Dr. John Wagner learned about charitable gift annuities a number of years ago, he told himself that if the Lord ever blessed him and his wife, Dr. Lilya Wagner, with enough money they would set one up. So when John and Lilya received an inheritance last month, that is exactly what they did - they set up a charitable gift annuity with Union College.

John understood the basics of how a charitable gift annuity worked, but about a year ago his curiosity compelled him to start asking the Union College development staff questions about his specific situation. Questions like: What would a gift annuity payout rate be for him and his wife; Could they delay receiving payments; and what would be their tax benefits?

The development staff was more than happy to answer his questions and to provide illustrations showing him all the benefits. The Lord hadn't blessed John and Lilya with enough money yet, but they determined in their hearts what they would do if and when the Lord did bless them.

That blessing came at a very sad time for John and Lilya because it came in the form of an inheritance from his mother's estate. Because of all the research John had done a year earlier, the decision to proceed with a charitable gift annuity was easy.

"Mom would have been pleased to know what we did with the money," John says. "The charitable gift annuity was an excellent way to preserve the money that she worked so hard for."

In fact, the decision was so easy that John simply walked into the development office and said, "OK, I'm ready to do the annuity." Then he signed over his inheritance check to Union College.

A Tax-Smart Way to Give
While doing his research on charitable gift annuities, John's curiosity also led him to ask about another planned giving technique, the IRA charitable rollover. John wanted to know if the IRA charitable rollover was still available and if it would make sense for him. The development staff was happy to explain how this type of gift works and encouraged John to consult with his tax preparer to determine what his specific tax benefits would be.

After consulting with his tax advisor, John learned that satisfying his IRA's annual required minimum distribution with a charitable rollover directly to Union College would provide him a significant tax advantage. So, with some more help from the development office, John was able to make the transfer from his IRA. "It is only good stewardship to figure out the best way to make a gift," John says. "I'd rather give my money to Union College than to Uncle Sam."

When asked what advice he would give to others who have been thinking about creating a charitable gift annuity or making an IRA charitable distribution, John quickly says, "Give it to Union! Gifts are a way for people to get actively involved on campus."

John expresses his deep appreciation for Union's supporters. He believes they are a conduit for God and that every gift Union College receives is a blessing from the Lord.

If you would like to take John's advice and talk with someone about setting up a charitable gift annuity or making an IRA charitable distribution to Union College, please call Ken Farrow at 402-486-2600, Ext. 2200 or email him at Ken Farrow will be just as happy to help you as he was in helping John.

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A charitable bequest is one or two sentences in your will or living trust that leave to Union College a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I, [name], of [city, state, ZIP], give, devise and bequeath to Union College, a certified 501(c)(3) not-for-profit corporation registered in the State of Nebraska, [written amount or percentage of the etate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to Union College or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to Union College as a lump sum.

You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to Union College as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and Union College where you agree to make a gift to Union College and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

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