FAQs About Planned Giving

Q. I am going to make the university a beneficiary of an IRA. What is its legal name?

Immaculata University, Immaculata, Pennsylvania.

Q. I received a scholarship and would like to give back to the university some day. Is there a way I can begin to "save" and do this?

Yes, one way would be to buy a life insurance policy naming the university owner and beneficiary. Send your annual premiums to the university as gifts, receive a tax deduction for same, and eventually the policy will help fund the scholarship or at least form the foundation for later gifts. Generally, young people pay small premium amounts.

Q. I am in my prime earning years and get socked by income taxes. Is there a tool that will help relieve me of taxes somehow?

A deferred gift annuity is a way that those from ages 50 to 70 can make a difference and be given a tax-deferred status. Annuity payments come later when your tax bracket is lower. When the university receives the gift, you receive a one time tax deduction.

Q. How does a gift annuity work?

In return for a donor's gift of $10,000 (minimum) or more, a gift annuity agreement is made with the individual and a financial institution, insurance company or a community foundation in which the university agrees to make fixed payments to the donor for life. Upon the death of the donor, the university assumes full ownership of the gift. The remainder is added to the university endowment fund if that is the donor's choice.

Q. Who may receive payments from the annuity?

Payments may be made up to two beneficiaries (also called annuitants). While typically the donor names themselves as annuitants, an annuity can also be established to benefit others, such as a parent or sibling.

Q. Again, what are the tax advantages of arranging a gift annuity with Immaculata University?

There are several options:

Federal income tax deduction in the year the gift is arranged, the donor can take a federal income tax deduction on the value of the eventual gift to the university. The size of the deduction is calculated from the IRS tables and includes the computation of the ages of the annuitants and the percentage of annuity payments. The older the annuitants, the larger the deduction.
Part of annual annuity payment is tax-free. The annuitant receives a portion for the remainder of his or her expected life span. As noted above, the older the annuitant, the larger the tax-free portion of the annual payments.
Partial avoidance of capital gains tax. As described above, if a donor uses appreciated securities to fund a gift annuity, he/she avoids a portion of the capital gains tax that would have to be paid if these assets were sold in order to reinvest for higher income.
Federal estate tax benefits. If the donor is the only annuitant, the assets used to fund the Gift Annuity are effectively removed from his/her estate for federal tax purposes. This usually results in a reduction of federal estate taxes upon the donor's death.

Q. What is a Deferred Charitable Gift Annuity?

A deferred charitable gift annuity, in its simplest form, is an annuity obligation for the benefit of the donor (or an individual named by the donor) that defers the first payment until a future date more than a year from the execution. Once begun, the payments continue for the life of the annuitant (or annuitants). This type of annuity provides a current charitable income deduction for the donor, larger annuity payments when the annuity begins, deferral of tax on the income until payments are actually received, and partially tax-free income upon receipt of the payments. The deferred charitable gift annuity is popular with younger persons as it is a means to build retirement income.

Before Immaculata realizes the full benefit of a planned gift arrangement like a trust or a gift annuity, you will have been provided some, or all, of the following advantages:

income for life for you and/or any other person
federal income tax deduction for a portion of the current value of the gift
elimination of tax on long-term capital gains if the gift is in the form of appreciated securities or other property
increased income if a gift is made to a trust which produces a higher yield than the property given