University of Delaware
Office of Public Relations
The Messenger
Vol. 6, No. 1/1996
Recognition: A Special Report
Planned Giving
For more than 250 years, the University of Delaware has
benefitted from the generosity of committed alumni and friends
who have included the University in their estate or financial
plans.
Such special gifts have helped provide scholarships for
talented undergraduate students, fellowships for deserving
graduate students and vital support for the research and teaching
endeavors of dedicated and outstanding faculty. Bequests and
other planned gifts also have helped to build new buildings and
to enhance and preserve existing facilities on campus.
The additional financial benefits associated with many
planned gifts may make it possible for you to support the work of
the University to an even greater extent than you thought
possible.
The University is grateful for all types of gifts and
welcomes the opportunity to work with you and your personal
advisers to determine if one or more planned giving arrangements
are appropriate for you.
Ten taxwise ways to invest in the University of Delaware
1. Bequests
The unlimited estate tax charitable deduction encourages
such gifts by reducing federal and state inheritance tax.
Charitable bequests can take several forms:
* specified amount of cash
* specific piece of property
* residual estate after all expenses, debts, taxes and specific
bequests are satisfied
* percentage of the residuary estate
* contingent bequest (when your named beneficiaries die before
you or refuse their bequests)
2. Revocable Living Trust
This trust can include a gift to the University of a
specific amount of cash, a specific property, a percentage of the
trust assets or all or part of the trust assets after providing
for other named beneficiaries.
3. Life-Income Gifts
Special arrangements can enable you to receive income for
yourself and another designated person, such as an elderly
parent, a child or your spouse. By itemizing deductions, you get
a charitable income tax deduction for your gifts, while avoiding
or substantially reducing capital gains tax on the sale and
reinvestment of assets used to fund the life-income gift.
Such life-income gifts include:
* Pooled Income Fund Gift
You may transfer securities and/or cash to the UD and your gift
is added to the University's Pooled Income Fund, where it is
invested. You will then receive your pro rata portion of the
fund's earnings for your lifetime.
* Charitable Remainder Trusts
You may transfer cash, securities and/or real estate to an
irrevocable trust that then pays you income-usually for your
lifetime. You can choose either fixed payments based on the value
of the assets when the trust is created or a variable income
stream based on the value of the trust as revalued each year.
* Charitable Gift Annuities
You may transfer cash and/or securities or real estate to the
University and receive a fixed annuity for life. The transaction
is partly a charitable gift and partly the purchase of an
annuity. Charitable gift annuities can be either
immediate or deferred. Donors can begin receiving their annuity
payments at some specified time in the future, while immediately
receiving a charitable income tax deduction.
4. Gift of Your Home or Farm
You may wish to deed a personal residence or farm to the
University now but retain the legal right for you and a survivor
to live there for life. A substantial income tax deduction is
available immediately and all the estate tax savings of a
charitable bequest also are retained.
5. Real Estate or Securities
If you contribute real estate or securities held for longer
than one year, your income tax charitable deduction will be based
on the asset's full fair market value, avoiding all capital gains
tax on the property's increase in value. When giving securities,
your broker can electronically transfer the securities to the
University or you can send unsigned stock certificates and a
signed stock power. If you endorse the certificates on the back,
no stock power is required, but your signature must be guaranteed
by a broker or appropriate officer of a bank.
6. Life Insurance
You can designate the University as the beneficiary of
either a new or paid-up policy. No income tax deduction is
generated; however, there will be no estate tax liability on the
value of the gift to the University.
You also can name the University as a contingent
beneficiary, should your primary beneficiary not survive you.
Or, you can make an irrevocable assignment of ownership of
an insurance policy to the University, receiving an immediate
income tax deduction based on the lesser of the policy's value or
the net premiums paid. You also may receive additional income tax
deductions for future contributions made to the University for
the payment of premiums.
7. Tangible Personal Property
When donating such items as works of art, antiques or books, your
deduction is based on the fair market value, providing the
University's use of the property is related to its educational
function. If the use is unrelated, the deduction is based on the
lesser of your cost basis or fair market value.
8. Bargain Sales
When you sell assets such as long-term appreciated
securities or real estate to the University at a price below fair
market value, you have made a gift of the difference between the
value and the sales price received. A pro rata portion of any
capital gains tax is avoided on the transaction.
9. Charitable Lead Trust
Assets can be transferred to an irrevocable trust, which then
makes payments to the University for a stated term. Trust assets
can be returned to you at the end of the trust term or you can
designate other individuals, such as younger family members, to
receive the trust assets. This reduces or even eliminates the gift
or estate tax imposed when passing property on to other family
members. (It is important that your own tax adviser assess tax
consequences before proceeding.)
10. Cash
You may make a gift of cash, which is deductible up to 50
percent of your adjusted gross income, if you itemize
deductions.
HOW TO TRANSFER STOCK TO THE UNIVERSITY
Many people find it attractive to make a gift of stock. If
you transfer stock that has been held for more than a year and has
increased in value, the University can sell the stock and you
avoid all capital gains tax.
If your stock has been held for more than a year and has
decreased in value, it may be more advantageous for you to sell
the stock and make a gift of cash to the University.
Stock gifts can be made in one of the following ways:
1. If you hold the stock certificate in your name, you can endorse
and date the back of the certificate, assigning it to the
University. Your signature must be guaranteed by a broker
or appropriate officer of a bank.
Another option is to obtain a stock power from a bank or
broker or you may call the Office of University Development at
(302) 831-2104.
When using the stock power, fill in only the signature(s) and
the date at the bottom. Please deliver or mail the certificate(s)
and stock power by certified mail to:
Ms. Viola Manogue
Administrative Coordinator
Office of the Treasurer
112 Hullihen Hall
University of Delaware
Newark, DE 19716
or
Ms. Paula Tilmon, Esq.
Office of University Development
Academy Building
Main Street
University of Delaware
Newark, DE 19716
If mailed, the certificates and the stock power should be sent
separately. The date of the gift will be the day the certificate is
delivered to the University or, if mailed, the postmark date.
2. If the stock is held in a street account, you may instruct your
broker to place the shares into an account in the name of the
University of Delaware. This should be confirmed in writing
and the broker should be instructed to contact the
administrative coordinator for instructions on disposal of the
shares. A copy of your note to the broker should also be sent
to the University treasurer's office.
3. If the stock certificate is made out in the name of the
University, no stock power is needed.
4. If giving fractional shares, the University can assist you
with your gift.
5. Stock also can be transferred directly to the University's
brokerage account via Depository Trust Co. (DTC).
The University's DTC transfer number is 2215. Instructions
should be given to place the stock in the University of
Delaware's Gift Account, Number 6727-3, at Wilmington Trust Co.
For assistance in making a gift of stock, please contact the Office
of University Development at (302) 831-2104 or the Office of
the University Treasurer at (302) 831-2130.
The University provides professionals to assist you in planning
your gift. Recognizing the highly personal nature of such
planning, these professionals assure that all inquiries are held
in the strictest confidence. For assistance or additional
information on charitable gift and estate planning opportunities,
please contact:
Paula M. Tilmon, Esq.
Director, Trusts and Estates
Office of University Development
Telephone (302) 831-2104
A 1966 graduate of the University of Delaware and the
daughter, spouse and parent of Delaware graduates, Paula Tilmon
shares your commitment to the University of Delaware and welcomes
the opportunity to assist you in meeting your charitable gift and
estate planning goals.
Allow us to send you a free brochure.
If you would like more information on how a gift to the
University may fit in with your estate planning, tax and
financial goals, please allow us to send you a new brochure
entitled Your Guide To Effective Giving.
For your complimentary copy, call Ms. Tilmon at (302) 831-
2104 or mail your request to her at the Office of University
Development, Academy Building, University of Delaware, Newark, DE
19716.