Giving Wisely

Your gift can take multiple forms and help you address a variety of personal financial goals. We are ready to work with you and your advisors to craft the gift plan that satisfies you. Here are some additional opportunities:

Travel through the Legacy Planner to help you decide what will work best. Click here to see what options will meet your particular situation. Use the following guide to help you weigh your options.

• Travel through the Legacy Planner to help you decide what will work best.
• Click here to see what options will meet your particular situation.
• Use the following guide to help you weigh your options.

1. Give now, or give later?

   A significant lifetime gift will give you maximum tax benefits, especially attractive if you are in high earning years. It can also be the simplest gift to arrange.

   However, you may prefer to leave your assets and cash flow alone until your death, and instead make your gift through your estate. Even though we would not use this gift immediately will help ensure that we can meet the opportunities and challenges the future will present us.

   You use a will or revocable trust to make a gift bequest from your estate. You may also use life insurance or the balance remaining in your retirement plan. These gifts help you keep your lifetime financial planning flexible. Contact your attorney to create a bequest and your retirement plan administrator to designate a retirement plan gift.

2. What assets to give?

   Cash
   It is, of course, the easiest transaction to make. You are limited only by your cash flow and your inclination to draw from your cash reserves.

   Appreciated securities
   Get the same tax deduction as if you had given cash, but use stocks or mutual funds that cost you less than they are currently worth. Your deduction is based on current market value, and you can bypass capital gains tax on the transfer to us. We can work with your broker to make a gift of securities simple.

   Real Estate Gifts of homes, farms, land, vacation homes or income-producing properties can be great assets to give. We review each gift proposal carefully to determine if we can accept the gift. You can give real estate outright, transfer it in a part sale/part gift arrangement, use it to fund a life-income gift, or give your residence and reserve the right to continue to live there.

   Retirement Plans
   The balance remaining in your retirement account after your death is subject to double taxation if it passes to your heirs: it's taxed both as income and as an estate asset. Result? Over 75% of the account value may go to taxes. It's a better plan to designate the remainder of your account to the University of Colorado Foundation, and then use other assets for gifts to your family. We're ready to assist you.

   Business Interests
   An interest in a business, shares of closely held stock, or a limited partnership share can make wonderful gifts. We'll review the proposed gift, and if we are able to take it, we will work with you and your advisors to make the transfer.

3. How can a gift pay me back?

   There is a family of gifts that transfers assets to the foundation and then returns income to you. A life income gift can do just that. You can receive fixed or variable income, take payments for your lifetime or for a term of years, or direct the income to other beneficiaries. In essence, you make a contribution yet retain benefits from what you gave away.

   Your charitable deduction is based on the full market value of the assets you gave, minus the present value of the income interest you retained. The higher the income payout, the lower the deduction.

   These flexible, creative gifts address a variety of your planning objectives. For our part, the return of income permits a more substantial gift to than you might be able to afford in an outright format. Even though we cannot use these gifts until the death of the last income beneficiary, they give us long-term financial strength that will sustain in the future.

4. What are my choices in life income gifts?

   A charitable gift annuity is the simplest; in return for your gift, we contract to pay you and/or another beneficiary fixed income for life. There is also an attractive reduction in the taxation of annuity payments a portion of because your payments a return of principal. This gift option is not available to donors living in certain states.

   A deferred gift annuity delays the inauguration of income payments to the beneficiaries. In return for this delay, the deferred annuity increases both the income payout rate and the charitable deduction above those of an annuity starting income payments immediately. If you are currently in high-earnings years, looking for tax deductions and new sources of retirement income, a deferred gift annuity with income set to start when you turn 65 may fit your needs well. This gift option is not available to donors living in certain states.

   A charitable remainder annuity trust is another option if you are seeking fixed income. Gift annuities are contracts between you and the University of Colorado Foundation, with payments made to you as an obligation of our organization. However, the annuity trust is an individually managed trust out of which income payments are made to you. It can pay income for a life or terms of years (up to 20) while a gift annuity can only make payments for life.

   The charitable remainder unitrust is the most flexible life-income gift, and it also pays you variable income. The amount received by beneficiaries is based on a fixed percentage of the value of the principal, which is revalued annually. Income in excess of the unitrust amount is reinvested in principal. The unitrust can pay income for lifetime or a term of years. Like the annuity trust, the unitrust is individually managed. Two advantages of a charitable remainder unitrust are that you can make new gifts into it and even make a gift or real estate.

   A special feature of the unitrust is the ability to grow principal over time, then reinvest for income, with no capital gains cost. This feature, explained in the text, allows you to build up a fund for later needs, such as tuition for children and grandchildren.

5. My goal is to keep my estate intact, not increase my income ...

   Consider a charitable lead trust. It works in reverse from the life-income gifts discussed in Questions 3 and 4, above: your gift is placed in a trust that pays income to us for a term, and then returns the principal to you or your heirs.

   The lead trust is a very effective tool to help transfer assets to heirs with reduces gift tax or to give yourself a large income tax deduction if the assets later return to you.

   • If the assets are to pass to your heirs, any growth in the principal after the trust is established transfers tax-free.

   • You receive a gift tax deduction for the annual payments that come to us.

   If you have a growing family business or a rapidly appreciating portfolio, and children whom you'd like to benefit, a lead trust may be just what you're looking for. If you want to establish a series of payments to benefit the University of Colorado and then have the principal return to you, a particular type of lead trust can do this for you.

University of Colorado Foundation
Gift Planning Group
4740 Walnut Street
Boulder,Colorado 80301
(800) 405-9488 | Fax: (303) 541-1397