The largest gifts to the College have traditionally been estate gifts. Estate gifts may be a few hundred dollars or millions of dollars. Like all other gifts they may be "unrestricted" for use where need is greatest, or "restricted" to a particular program. Your estate gift allows your assets to continue helping Cedar Crest College long after you are gone.
Please make bequests to Cedar Crest College. A bequest may be
particularly attractive as a gift option if you are unable to make
a current (outright) gift, but would like to contribute to the
College in a meaningful way. Bequests may be restricted or
unrestricted and will be used where need is greatest.
Specific bequests are most common. You leave a specific amount of
money, a specific asset, or a specific percentage of your estate to
Cedar Crest College.
Residual bequests go to the College only after all debts, expenses,
taxes, and other bequests have been paid.
Contingent bequests are ways for you to contribute to the College
even if you have young children. The contingent bequest takes
effect only when all other bequests fail.
EXAMPLE: "If my granddaughter should predecease me then I leave
my entire estate to Cedar Crest College
for the benefit of the
unrestricted endowment fund."
Your Will may direct that a portion of your estate will go to a
pooled income fund or a charitable remainder trust. The pooled
income fund or charitable remainder trust will then pay life income
to a named beneficiary. After
the beneficiary's death, Cedar Crest
College will receive any remaining funds.
Two forms of life insurance are typically donated: paid-up whole
and universal life insurance policies, and newly issued whole and
universal life insurance policies. A paid-up policy has a cash
value that may be used immediately if necessary by the College.
Taking out a new whole life or universal life insurance policy is
one way to make a significant gift to the College. The policy may
be structured such that you only pay premiums for approximately ten
years and each year's premium payment is tax-deductible. If you are
considering such a life insurance policy, we suggest that you
contact one of our Development Officers before beginning the
insurance policy paperwork.
Newly issued whole and universal life insurance policies usually
have little or no cash value. Therefore, they provide no benefits
until significant cash value builds within the policy or the
insured passes away.
For all whole and universal life insurance policies, you should
name the College as both owner and beneficiary. Your tax deduction
is equal to the lesser of either the replacement cost or the cost
basis of the policy.
If you pay any further premiums, those payments are also
tax-deductible. Payments in the amount of the premium should be
paid to Cedar Crest College. The College will then pay the
insurance company premiums.
Even though term life policies do not provide a charitable income
tax deduction, we encourage you to remember Cedar Crest College as
a beneficiary of your term policy.
If a person simply makes Cedar Crest College a beneficiary of a
life insurance policy, no income tax deduction is allowed. However,
upon the death of the insured,
the policy proceeds going to the
College will be an estate tax charitable deduction.
Imagine making a gift that gives back to you. You may make a gift of cash, securities, and/or real estate to Cedar Crest College and retain the right to receive income from those assets for as long as you live. Usually you include your spouse or another beneficiary in the gift contract so they will continue to receive life income if you predecease them. At your death and/or the death of the last remaining beneficiary, the College receives the remaining principal.
Pooled Income Funds were designed to allow you to give away assets,
such as stocks or bank savings, while keeping the right to receive
the interest and/or dividend income. The College may use the
remaining principal only after your death (and the death of one
surviving beneficiary if one is designated).
A pooled income fund gift provides several financial and estate
planning benefits:
Charitable Remainder Trusts are basically similar to the Pooled
Income Fund in concept. There are two main types of charitable
remainder trusts: Annuity Trusts and Unitrusts. With both types of
trusts, you receive a charitable contribution income tax deduction
based on your life expectancy, you avoid taxes on capital gains on
the sale of appreciated securities or real estate, and you reduce
potential estate taxes. The main difference between the two types
of charitable remainder trusts is the way your annual income from
the trust is determined.
Annuity Trusts - The assets given to a charitable remainder
annuity trust are valued on the date of transfer to the trust. An
annual payout is determined on that date. You receive this same
dollar amount each year for life. Any named beneficiaries will also
receive this same amount for life. After your death and the death
of any beneficiaries, the remaining principal is given to the
College.
When you create the trust, you receive an income tax charitable
contribution deduction based on your life expectancy and the life
expectancy of any beneficiaries (such as a spouse). You avoid taxes
on capital gains on the sale of any appreciated property such as
stocks or real estate. The assets in the trust are removed from
your estate for estate tax purposes. (Depending on the existence of
named beneficiaries of the trust, some of their expected life
income may be included in your estate.) After your death, your
designated interests at Cedar Crest College will perpetually
receive support in your memory. Annuity trusts are usually created
with assets worth $50,000 or more.
Unitrusts - The assets given to charitable remainder
unitrusts are valued each year; an annual income payout is made
based upon a fixed percentage determined when the trust is
established.
This allows for a variable payout from year to year, in contrast to
the fixed dollar amount payout from the annuity trust. The unitrust
is often used when inflation and its effect on the future
purchasing power of a fixed income is a concern.
The same basic tax benefits that applied to the annuity trust also
apply to the unitrust. Unitrusts are usually created with assets
worth $50,000 or more. There are Charitable Remainder Trusts and Life
Insurance Trusts (Wealth Replacement Trusts).
In addition to making significant charitable gifts possible, both
types of charitable remainder trusts (annuity and unitrust) are
excellent financial and estate planning tools. The drawback,
however, is that the assets donated to the trust are irrevocably
taken from potential heirs and given to charity.
A very popular alternative used today is a combination of a
charitable remainder trust and a life insurance trust. The
charitable remainder trust provides lifetime benefits to you, the
donor, and then after death to the charity.
The life insurance trust replaces to your heirs the asset value
given to charity and may increase your heirs' net inheritance over
what they would have
received had you not made the charitable
gift.
A life estate agreement allows you to give your home or farm to the
College today, but retain the right to live in the home or use the
farm for life. You may also stipulate that your spouse may continue
to live there for his/her lifetime. You receive an immediate income
tax deduction based upon your age(s) and the useful life of the
property, and you remove the home or farm value from your estate.
You must continue to maintain the property, insure it, and pay
property taxes. After your death, Cedar Crest College becomes owner
of the property and may utilize the property for College-related
purposes or sell the property to generate funds.
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