Gifts through your estate are a very popular way to meet your philanthropic and financial goals.
Estate gifts are simple to establish and allow you financial flexibility, so you can adjust your plans depending on your needs. Creating a planned gift may also reduce or eliminate federal and state estate taxes.
Estate gifts offer these benefits:
- You may direct all or a portion of your estate to the university.
- The assets, regardless of their value, are not subject to estate taxes.
- Giving through your estate plan generates a charitable estate tax deduction — and may provide important tax savings.
Please consult with your legal or tax advisor before making a charitable gift.
Estate gift options
Provide for the university through your estate plan by naming the university in your will or trust.
You may designate a specific dollar amount, a percentage of the estate, or a specific asset.
Giving through your will or trust enables you to specify the purpose of your gift, add to a fund you already have established, and reduce your estate taxes by generating an estate tax charitable deduction.
If you are drafting an estate plan with your attorney, consult our sample bequest language, which you can share with your attorney as you consider a bequest in your will or trust. The Office of Planned Giving is always available to discuss specific bequest language that will fulfill your charitable giving objectives.
Name the university as a beneficiary of your retirement plan, life insurance policy or commercial annuity.
This giving option is quite simple, and you retain the right to change or amend the beneficiary designation. Simply designate the university as beneficiary by completing a Change of Beneficiary form provided by your plan custodian. You may either designate a percentage or a specific dollar amount.
Giving these assets to the university is an excellent tax-planning strategy, because distributions to the university are not subject to income and estate taxes. Distributions made through beneficiary designations are not subject to probate, either.
To designate the university as beneficiary on bank and brokerage accounts, see Payable/Transfer on Death Designations.
Name the university as beneficiary on your bank accounts, brokerage accounts, and other financial investments.
By completing a “Payable on Death” or “Transfer on Death” designation with your financial institution(s), you can create an efficient and powerful gift to WashU. You also retain the right to change the beneficiary on the accounts as long as you own them. After your lifetime, the funds for the designated accounts are not subject to estate taxes and will pass outside of probate to transfer directly to the university.
Because each financial institution may have its own guidelines, and not all allow this type of designation, it is important to verify specific procedures with your financial institution. The Office of Planned Giving can provide you with the information to complete the beneficiary designation or payable/transfer on death designation.
Name the university as a beneficiary of your IRA, 401(k), 403(b), or other qualified retirement plan.
Gifting a distribution through your QRP at your passing is one of the most tax-efficient ways to give.
Your QRP may be one of your largest assets, one that has grown appreciably through the years. You may want to leave these funds to your family or other individuals; however, distributions from retirement plans given to individuals other than your spouse may be subject to both income and estate taxes. This loss to taxes can often exceed 50 percent or more.
Avoid or reduce this loss by naming the university as a death beneficiary of the QRP. Such distributions to WashU are not subject to income or estate tax.
- You can also make an outright gift from your IRA during your lifetime through a qualified charitable distribution from an IRA. This approach allows you to give up to $100,000 per calendar year to WashU while meeting some or all of your IRA’s minimum distribution requirement.
- Looking to use your QRP funds to support family and friends? Consider designating the assets of a QRP in whole or in part to a charitable remainder trust or charitable gift annuity. This strategy will reduce tax losses, provide income for life or a specified number of years, and then provide a significant gift to the university when the trust ends.
Name the university as a total or partial beneficiary of an annuity contract such as a tax-deferred annuity.
With this approach, you avoid taxes that would be incurred if your family members or other individuals received the proceeds from the annuity after your lifetime.
Distributions from annuities may be subject to significant income and estate taxes if distributed to individuals after your lifetime. However, both income and estate taxes can be avoided if the university is named as beneficiary.
The Office of Planned Giving can provide information on naming the university as beneficiary on commercial annuity contracts.
Life insurance can be a very flexible and effective means to support your favorite programs at the university. There are several ways to make a gift of life insurance.
Such gifts include:
Revocable beneficiary designation
Name the university as a partial or full beneficiary of a life insurance policy
You will retain full control of the policy during your lifetime, and the university will receive the insurance proceeds at your death. Your estate will receive a charitable estate tax deduction for the amount of the gift provided to the university upon your death.
“Paid-up” life insurance policy
Transfer ownership of a paid-up life insurance policy to the university.
A “paid-up” policy is one on which you no longer are required to make premium payments. This transfer becomes an irrevocable gift to the university. You may receive a charitable income tax deduction.
Existing Life Insurance Policies
Gift the university a life insurance policy on which premiums are still being paid.
To make such a gift, you may irrevocably assign ownership of the policy to the university. Since the university will be required to pay the remaining premiums on the policy to prevent it from lapsing, you will make an annual tax-deductible gift to the university that is equal to the premium owed. The university will make the premium payments to the insurance company. You may also receive a charitable income tax deduction if the policy has cash value.
New life insurance policy
Give by taking out a new insurance policy and naming the university as owner at the time the policy is issued.
Since the university will be required to make the subsequent premium payments in order to keep the policy in force, you will make a tax-deductible contribution to the university equal to the required premium payments. The university would then make the premium payments to the insurance company.
Gifts of life insurance, with the exception of revocable beneficiary designations, require an appraisal from a qualified appraiser to substantiate your deduction.
Establish a life-income plan through your estate.
Many people want to make a significant gift to the university through their estate plan, but may have concerns about providing for survivors. Some alumni and friends have funded a life-income plan, such as a charitable remainder trust or gift annuity at their passing.
You may include language in your estate plan that directs a gift to the university by establishing a plan that will make payments to named beneficiaries such as your spouse, family members or friends. When the payments end, the remaining assets will be used by the university to support the school or program you designate. A portion of your gift will generate a charitable estate tax deduction.