Gift Planning

Planning Your Legacy

You’ve worked hard to build your assets. You want to use those assets to ensure a strong future for yourself, your family, and for Notre Dame. By giving wisely, you can.

Your planned gift can take multiple forms and help you address important personal financial goals. Do you want to make a significant gift during your lifetime, or would making a gift through your estate be better? Do you have a particular asset you are thinking of donating? Do you want to increase your retirement income, or is your primary goal estate preservation? Are you carrying excess life insurance or a large balance in your retirement plan?

Notre Dame’s Gift Planning Staff is ready to work with you and your financial advisers to craft a gift plan that satisfies your goals. Compare gift options to determine which is best for you.

Use the following guide to help you weigh your options:

Give now, or give later?

A significant lifetime gift will allow Notre Dame to meet our immediate objectives. In turn, it will give you maximum tax benefits, which is especially attractive if you are in high earnings years. It can also be the simplest gift to arrange.

You may, however, prefer to leave your assets and cash flow alone until your death, and instead make your gift through your estate. Even though we would not use such a gift immediately, it would be critically important for long-term financial strength and would help to ensure that we can meet the opportunities and challenges of the future.

A will or revocable trust is used to make an estate gift. You may also use life insurance or your retirement plan. These gifts help keep your lifetime financial planning flexible, although they provide only limited income tax benefits. You will need professional assistance to set up most estate gifts.
What assets to give?

Cash. Cash is, of course, the easiest transaction to make. You are limited only by your cash flow and your inclination to draw from your cash reserves.

Appreciated securities. Get the same tax deduction as if you had given cash, but use stocks or bonds that cost you less than they are currently worth. Your deduction is based on market value, but you incur no capital gains liability on the transfer to Notre Dame. It is one of the best tax incentives around, and we can work with your broker to make a gift of securities simple.

Real estate. Gifts of land, vacation homes, or income-producing properties can provide great benefits for Notre Dame. You can give real estate outright, transfer it in a part sale/part gift arrangement, use it to fund a life-income gift, or give your residence and reserve the right to continue to live there.

Retirement account. The balance remaining in your retirement account after your death is subject to double taxation if it passes to your heirs: it is taxed both as income and as an estate asset. The result? Over 75 percent of the account value may go to taxes. A better plan is to designate the remainder of your account to Notre Dame, and then use other assets for gifts to your family. New regulations simplify the procedure to name Notre Dame as beneficiary.

Appreciated property. You may be holding property such as books, artwork, or equipment that you no longer wish to maintain. These assets could bring real benefit to Notre Dame. Particular IRS requirements must be met before you can deduct a gift of appreciated assets. We will review each gift proposal carefully to make sure that we can put the asset to good use.

Business interests. A partnership, an interest in a business, shares of closely held stock, or a limited partnership share may all hold value for Notre Dame. We will review the proposed gift, and if we agree, will work with you and your advisers to make the transfer simple.
How can a gift pay me back?

A certain family of gifts transfers assets to Notre Dame while returning income to you. You can use these to convert low-yielding securities to a higher income stream at a greatly reduced capital gains cost. You can receive fixed or variable income, take payments for your lifetime or for a term of years, and direct the income to other beneficiaries. In essence, you make a contribution yet retain benefits from what you gave away.

Your charitable deduction is based on the full market value of the assets you gave, minus the present value of the income interest you retained. The higher the income payout, the lower the deduction.

These flexible, creative gifts address a variety of your planning objectives. For Notre Dame, the return of income permits a more substantial gift than you might be able to afford outright. Even though we cannot use these gifts until the death of the last income beneficiary, they provide Notre Dame with long-term financial strength.
What are my choices in income gifts?

A charitable gift annuity is the simplest; in return for your gift, we contract to pay you and/or another beneficiary fixed income for life. The income rates and the charitable deduction tend to be higher with a gift annuity than with other life-income gifts. There is also an attractive reduction in the taxation of annuity payments. This gift plan is most appropriate if you are risk-averse in your investing and if long-term fixed income is an appropriate strategy for you.

A deferred gift annuity delays the inauguration of income payments to the beneficiaries. In return for this delay, the deferred annuity offers income rates and charitable deductions that are higher than those of an annuity with immediate income payments. If you are currently in a high earnings year, or looking for tax deductions and new sources of retirement income, a deferred annuity with income set to start when you turn 65 may fit your needs well.

The charitable remainder unitrust is the most flexible life-income gift, and it also pays variable income. The amount received by beneficiaries is based on a fixed percentage of the value of the principal, which is revalued annually. Income in excess of the unitrust amount is reinvested, so that the unitrust's income rate can be applied against an increasing principal over time. The unitrust can pay multiple beneficiaries and can pay income for lifetime or a term of years. The unitrust is individually managed and requires a larger gift to make the management feasible.

A special feature of the unitrust is the ability to grow principal over time, then reinvest for income, with no capital gains cost. This feature allows you to build up a fund for later needs, such as tuition for children and grandchildren.
My goal is to keep my estate intact, not increase my income...
Consider a charitable lead trust. It works in reverse from the life-income gifts discussed above: in this case, your gift is placed in a trust that pays income to us for a term, then returns the principal to you or your heirs.

The lead trust is a very effective tool to remove a portion of your estate from tax liability:
- If the assets are to pass to your heirs, any growth in the principal after the trust was inaugurated is exempt from estate tax.
- Further, the amount subject to taxation is reduced by the value of our income interest.
If you have a growing family business or a rapidly appreciating portfolio, and children whom you would like to benefit, a lead trust may be just what you are looking for.