The following is an overview of the planned giving program at Wittenberg University.  We have provided a summary of planned gift alternatives that Wittenberg alumni and friends frequently use when making gifts to the university. 

Making a Planned Gift to Wittenberg University

A planned gift to Wittenberg can take many forms, including:

• A bequest in your will;
• A charitable gift annuity;
• A charitable remainder annuity trust or unitrust;
• A designation as a beneficiary of your life insurance policy;
• A designation as a beneficiary of your retirement plan or IRA.

Planned gifts are an important way to build Wittenberg’s endowment and to provide funds for the future use of the university.  Your planned gift to Wittenberg University is a gift of lasting significance.

A Gift Through Your Will

A bequest to Wittenberg through your will is the simplest planned gift you can make.  It can be for any amount and almost any purpose.  A bequest permits you to make a substantial gift to the university without decreasing the assets available to you during your lifetime.  Also, important estate tax savings can result.  There are several kinds of bequests you can consider:

• A bequest of a percentage of your estate;
• A bequest of a specific dollar amount;
• A bequest of a specific piece of real or personal property;
• A bequest for a specific purpose.

Although it is possible to designate a specific purpose for your bequest, the needs of the university change over time.  We request that any specific purpose be stated as a preference with the final determination left to the discretion of Wittenberg’s Board of Directors.

The suggested language for a bequest to Wittenberg University is:

Percentage:
“I give, devise and bequeath to the Board of Directors of Wittenberg College, operating Wittenberg University, located in Springfield, Ohio, for the support of Wittenberg University _____percent of the residue of my estate, the principal and income to be used in such a manner as it deems best.”

Dollar Amount:
“I give, devise and bequeath to the Board of Directors of Wittenberg College, operating Wittenberg University, located in Springfield, Ohio, for the support of Wittenberg University, the sum of $ ________, the principal and income to be used in such a manner as it deems best.”                                          

Bequest for a Specific Purpose:
“I give, devise and bequeath to the Board of Directors of Wittenberg College, operating Wittenberg University, located in Springfield, Ohio, for the support of Wittenberg University, the sum of $ _________ (or the following described property) to establish The __________________Fund.  The Fund income, but not the principal, should be used for ______________________________.  If, in the judgment of its Directors, changed circumstances should at some future time render the designated use of this Fund no longer appropriate, then the Directors should use the Fund income to further the objects and purposes of Wittenberg University.”

Charitable Gift Annuity

A charitable gift annuity is a contract between you and Wittenberg University.  In exchange for your gift, the university agrees to pay you and/or another income beneficiary a fixed dollar amount for life.  The annual annuity rate is determined by the age of the income beneficiary and by the annuity rates determined by the American Council on Gift Annuities.  A charitable gift annuity offers a range of benefits:

• You will receive a fixed income from your gift annuity for your life;
• Your gift annuity payments are backed by the full assets of the university;
• You can enjoy favorable capital gains tax treatment when you gift appreciated assets to the university;
• A part of your gift annuity payment may be a tax-free return of principal;
• Your gift annuity income may be greater than the income from your current investments.

 

Deferred-Payment Charitable Gift Annuity

A deferred-payment charitable gift annuity involves the current transfer of cash or marketable securities to Wittenberg University in exchange for the university’s promise to pay the donor an annuity starting at a future date, such as at the donor’s retirement.  The deferred-payment annuity may be an appropriate gift planning tool for that individual who is still active in their career, who has a high current income, who will benefit from a current charitable tax deduction, and is interested in building future retirement income.  Benefits afforded by a deferred-payment gift annuity include:

• You will enjoy favorable capital gains treatment when you transfer appreciated assets to Wittenberg;
• You will receive a federal charitable income tax deduction for a portion of your gift;
• You determine when you wish to begin receiving annuity payments;
• A part of your annuity payment may be a tax-free return of principal.

 

Charitable Remainder Annuity Trust

The charitable remainder annuity trust offers a fixed income payout that provides income for life or for a term of years.  You determine how much will be paid out.  Upon termination of the trust, the assets will be paid to Wittenberg for the purposes you determine. 

A charitable remainder annuity trust offers a range of benefits:

• You will receive favorable tax treatment when you transfer appreciated assets to your annuity trust;
• You will receive an immediate income tax charitable deduction for a portion of your gift;
• You will receive a fixed amount of income each year of the trust; 
• Your annuity income may be higher than the income you receive from your current investments.

Charitable Remainder Unitrust

A charitable remainder unitrust provides for the distribution of a percentage (five percent or more) of the annual value of the trust principal for your lifetime or for a term of years.  Although the growth of principal cannot be guaranteed, if the principal of the unitrust appreciates in value, the amount of income distributed will also increase.  Upon termination of the trust, the assets will be paid to Wittenberg to be used for the purposes you determine.

A charitable remainder unitrust offers a range of benefits:

• Your income from your unitrust may be higher than the income you receive from your current investments;
• Your unitrust income may increase over time;
• You will receive favorable tax treatment when you transfer appreciated assets to your unitrust;
• You will receive an immediate charitable income tax deduction for a portion of your gift.

Charitable Lead Trust

A charitable lead trust creates a current stream of income for Wittenberg for a period of years, after which the remaining trust principal passes to parties you designate, usually children or grandchildren.  Wittenberg benefits immediately through annual payments from the trust, and trust assets can continue to grow before they pass to the next generation.

A charitable lead trust can effectively transfer assets from one generation to another at a significantly reduced gift and estate taxes, preserving more of your assets for the purposes you choose.

Because an amount has been distributed to charity, the gift or estate taxes due on the transfer to heirs can be greatly reduced.  If such a trust is created during the donor’s lifetime, gift tax may be due when the trust is established, depending upon how much income will go to charity.  Any appreciation in the trust passes to heirs with no additional tax due.  Assets donated to the trust may be sold or held intact if they can produce the required income stream.  Donors sometimes use businesses or closely held stock to fund these trusts.

Life Insurance Policy Beneficiary

Life insurance can be used as a gift to the university.  You may:

• Make Wittenberg the beneficiary of an existing policy and earn an estate tax charitable deduction;
• Make the University the owner and beneficiary of an existing policy, removing that asset from your taxable estate and earning an immediate income tax deduction approximately equal to the cash value of the policy.  Future premium payments on the policy may also be deductible for income tax purposes;
• Take out a new policy with Wittenberg as the owner and beneficiary.  Future premium payments on that policy may also be deductible for income tax purposes.

Retirement Plan Beneficiary

Wittenberg University can be designated as a beneficiary of an IRA, 401(k), 403(b), or other retirement plan.  By naming Wittenberg your beneficiary, your estate will receive an estate tax charitable deduction.  You can designate a specific amount or a percentage of the benefit, and you can restrict your gift to a specific purpose or make an unrestricted gift to the University.

Charitable Gifts from IRAs

The Pension Protection Act of 2006 allows charitable gifts to be made directly from IRAs without recognition of income.  If you are considering a gift from your retirement assets, please note:

• The legislation is good for all of 2006 and 2007 only;
• The maximum gift in any one year is $100,000;
• Donors must be at least age 70 ½;
• Income will not be recognized on the withdrawal;
• The gift must be paid directly from the IRA to the charity;
• Gifts cannot be made to the following: private foundations, donor advised funds, supporting organizations, charitable lead trusts or life income gifts such as charitable remainder trusts, pooled income funds, or charitable gift annuities;
• The charitable transfer will count toward your minimum required distribution;
• There is no charitable deduction associated with the gift;
• Distributions from qualified plans (401(k) for example) are not allowed -- there must be a rollover to an IRA and then a charitable distribution from the IRA.

Who may benefit from this new law?

• Donors who already have reached their giving limits based on adjusted gross income;
• Donors whose income level causes the phase-out of their exemptions;
• Donors who don’t itemize their deductions;
• Donors for whom additional income will cause more Social Security income to be taxed.

Please contact Wittenberg’s Office of University Advancement to discuss gift planning alternatives.

Richard W. Stenberg
Director of Major Gifts and Gift Planning
Wittenberg University
Post Office Box 720
Springfield, Ohio 45501-0720                                              
(937) 327-7460
rstenberg@wittenberg.edu

This information is not intended as legal, tax or investment advice.  For such advice, please consult your attorney, tax professional or investment professional.