Many alumni and friends are interested in making a planned gift to the law school. These gifts offer benefits ranging from life income to estate planning and income tax reduction.
If this is something that you may be considering, please contact Assistant Dean Burnie Atterbury at (415) 422-2551 in the Office of Development and Alumni Relations for more information.
Gifts of Appreciated Securities
If you have marketable securities that have grown in value, the tax laws make it possible for you to make a gift at a remarkably low after-tax cost.
A gift of appreciated securities generally qualifies you for an income tax charitable deduction equal to the value of the gifted securities, and it may also avoid the long-term capital gain tax on your unrealized capital gain. You can deduct up to 30 percent of your adjusted gross income in the year of your gift. Any amount given over 30 percent can be carried over and deducted for up to five subsequent years.
Typically, a sale of appreciated securities results in a tax and you keep only part of the profit. But if you give those same appreciated securities to the University of San Francisco School of Law, there is no tax on your gain, even though your "profit" is counted as part of your charitable deduction.
Gifts of Real Estate
The tax benefits of appreciated real estate are very similar to those for gifts of appreciated securities.
First, you avoid capital gain tax on the growth in value. Second, you receive an income tax charitable deduction for the full fair market value of the property contributed. Gifts of appreciated real property may be transferred to the University of San Francisco School of Law. This may be accomplished by deed during a donor's lifetime, or through his or her will.
As with gifts of cash and appreciated securities, real estate gifts can be made outright, or through an income-producing gift arrangement. It is also possible to make a tax-deductible current gift of your home while you continue to live in and enjoy it, and at the same time earn income from your gift.
Personal Property and Other Assets
Antiques, paintings, and other "collectibles"-even patents and copyrights-can be valuable assets for giving. In many cases the same tax rules that apply to securities and real estate apply to these gifts.
Benefits from IRAs and Pensions
Many people find that one of the more significant assets in their estates is their retirement plan investments. Yet it is one asset that is costly for owners to pass on to heirs after his or her lifetime.
Retirement plans may be subject to taxes of nearly 80 percent when the owner dies and the final distribution is made. This is due to the imposition of some or all of the following: income tax that would have been due had the owner received the distribution, estate and inheritance taxes, excise tax on excess accumulations, and generation skipping transfer tax.
Your estate can save significantly on both income and transfer taxes if you make The University of San Francisco School of Law Foundation a beneficiary of your individual retirement account, pension, 401K, or other retirement savings plan. You also can arrange for lifetime income to be paid from retirement funds to a family member after your death, with the law school's benefit coming later, or make the law school an alternative or contingent beneficiary.
Charitable Remainder Trusts
For many years, people have been using charitable remainder trusts to assist them in personal, financial, tax, and philanthropic planning. It's an excellent opportunity for donors, as private individuals, to have a tax-exempt trust working for them. The charitable remainder trust is a proven way to provide for the law school's future while satisfying personal and family financial needs.
A charitable remainder trust is an arrangement in which you irrevocably place money or property with a trustee, such as the University of San Francisco School of Law, with instructions to pay income to you or other chosen beneficiaries, generally for life. The income is a fixed amount or a fixed percentage of the trust's value. When all persons receiving the income die, the property remaining passes to the law school.
Charitable Gift Annuity
You can make a gift for the law school's future benefit and retain fixed lifetime annuity payments for yourself or other beneficiaries. This is one of the simplest gift plans offered by the University of San Francisco School of Law.
There are a variety of tax and financial benefits from a gift annuity. A portion of the income from the gift may be tax free. Capital gain taxes can be minimized if you use highly appreciated assets to fund your gift. Additionally, you are entitled to a substantial income tax deduction in the year you make the gift.
Gifts by Will or Living Trust
A will can be the foundation of a well-drafted estate plan. It divides and distributes property, can provide security for family members, can minimize taxes and estate costs and, through a bequest, can create a lasting legacy for law school. Many people use a living trust as a substitute for a will or in conjunction with one.
- Specific Bequest: The specific bequest gives a specific item or a specific piece of property to the law school. Such bequests are fulfilled before cash and residuary bequests.
- Cash Bequest: A cash bequest is an excellent alternative to the specific bequest. The cash bequest states that the University of San Francisco School of Law will receive a certain specified sum of money from your estate. Such bequests are fulfilled after specific but before residuary bequests.
- Residuary Bequest: This bequest is made from the assets remaining in your estate after all specific and cash bequests, taxes, settlement costs and debts are satisfied. Generally this is stated as a percentage, if you wish to divide the residue of your state among different beneficiaries.
The Testamentary Trust
All gifts reviewed here can be arranged to take effect only after your death. This type of arrangement in your will serves as a "deferred gift" for the school of law's benefit after it helps family members. A bequest of this type provides your beneficiaries with the investment and management expertise of a trustee. Furthermore, the gift can yield significant estate tax savings.
You can name University of San Francisco School of Law as the beneficiary of your life insurance by simply contacting the company. You can also transfer actual ownership of the policy to the law school, or buy a new policy, which may entitle you to an income tax deduction.