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Gifts from Your Estate and Life-Income Gifts

Financial and Tax Benefits

For further information contact the Office of Planned Giving at (314) 935-5373 or (800) 835-3503.
PDF iconFinancial and Tax Benefits Chart

  Life Income Plans
    How Gift Works Financial and Tax Benefits
 
Charitable Gift Annuity (CGA)
  • Gift annuities pay an immediate, fixed amount to one or two persons for life, with the payout percentage based on the recipient’s age at the time the annuity is established.
  • Funded with cash or appreciated securities (minimum gift of $5,000 or more) by persons 60 years of age or older.
  • WU receives remaining principal when the donor’s payments end.
  • Fixed lifetime payments to donor and/or donor’s designee.
  • Donor receives a current income tax deduction for a portion of the gift.
  • If appreciated securities are used to fund the CGA, a portion of the payment may be tax-free.
  • If the annuity is funded with cash, an even greater percentage of the payment is tax-free.
  • If appreciated securities are used to fund the CGA, immediate capital gain tax can be avoided.
 
Deferred Payment Charitable Gift Annuity (DPCGA)
  • The deferred annuity is often used as a supplement to retirement plans and offers a fixed payment beginning at some point in the future, often when earned income is lower or supplemental income is needed.  This gift is often used by donors who are  actively employed and by those younger than 60.
  • Deferred payment gift annuities offer a higher payout rate as compared to the standard charitable gift annuity, and can be funded with cash or appreciated securities (minimum gift $5,000 or more.)
  • WU receives remaining principal when the donor’s payments end.
  • Fixed lifetime payments to donor and/or designee beginning at a future date determined by donor at the time gift is made.
  • Donor receives an immediate charitable deduction.
  • As with the standard charitable gift annuity described above, some of the payment from the deferred gift annuity may be tax-free.
  • If appreciated securities are used to fund the DPCGA, immediate capital gain tax can be avoided.
 
Charitable Remainder Unitrust
  • Donor funds unitrust with cash, appreciated securities or debt-free real estate ($50,000 minimum).  Additional contributions may be made to the unitrust at any time.
  • The unitrust makes payments to donor based on a percentage (5% or 6%) of the annual value of the unitrust principal.  Annual payments may vary from year to year.
  • The unitrust may make payments to the donor for his/her lifetime and the lifetimes of other individuals.
  • WU receives remaining principal when the donor’s payments end.
  • Lifetime payments to donor and/or designee(s) based on a percentage (5% or 6%) of the annual value of the unitrust principal.  Payments may vary from year to year.
  • Donor receives an immediate income tax deduction for a portion of the gift.
  • Estate tax benefits occur at the end of the trust period.
  • If unitrust is funded with appreciated assets or real estate, capital gain tax is avoided.
 
Charitable Annuity Trust
  • Charitable annuity trusts provide fixed lifetime payments to donors based on a percentage (5% or 6%) of the initial value of the gift. 
  • Donor funds the annuity trust with cash, appreciated securities or debt-free real estate ($50,000 minimum).
  • The annuity trust may make payments to the donor for his/her lifetime and the lifetimes of other individuals.
  • WU receives remaining principal when the donor’s payments end.
  • Fixed lifetime payments to donor and/or designee(s).
  • Donor receives an immediate income tax deduction for a portion of the gift.
  • Tax-free principal growth. •Estate tax benefits occur at the end of the trust period.
  • If annuity trust is funded with appreciated securities or real estate, capital gain tax is avoided.
  Gifts Through Your Estate
 
Charitable Bequests
  • Donor designates WU to receive a specific amount or a percentage of your estate through donor’s will or revocable living trust.
  • Donor's estate is entitled to an estate tax charitable deduction for the value of the gift.
  • Capital gain taxes are avoided on the gift to WU.
 
Beneficiary Designations
  • Donor names WU as beneficiary on their retirement plan, life insurance policy, commercial annuity, bank accounts or other financial investments. 
  • Donor retains the right to change the beneficiary on the accounts as long as he owns them.
  • After Donor’s passing, the funds for the designated accounts will pass outside of probate and transfer directly to WU. 
  • Estate tax benefits occur when assets are transferred to WU.
  • Income tax is avoided  on the gift to WU.
  Charitable Lead Trust
 
Charitable Lead Trust
  • Donor designates specific assets which are held in trust and generate regular payments to the university for a time period specified by donor.
  • After the time period has elapsed, donor or donor’s heirs receive the trust principal.
  • Charitable lead trusts may be established during donor’s lifetime or through his/her estate.
  • Usually no income tax deduction.
  • May reduce transfer tax.
  • May reduce taxable estate by eliminating assets from the estate.

  Assets Tax Benefits
 
Cash
  • Generally, federal tax law allows you to deduct the full value of a cash gift up to 50% of your adjusted gross income (AGI) in one year. 
  • Deduction limited to 50% of your AGI with five year carryover for excess deductions.
 
Long-Term Appreciated Securities
  • Deduction for the gift’s full fair market value.
  • Deduction limited to 30% of your AGI with five year carryover for excess deductions.*
  • No reportable capital gain because WU sells the securities tax free.
 
Outright Gift of Real Estate
  • Deduction for fair market value of the property as determined by a qualified appraisal.
  • Deduction limited to 30% of your AGI with a five year carryover for excess deductions.
  • No reportable capital gain because WU sells the real estate tax-free.
 
Bargain Sale
  • Deduction for excess of the fair market value of the property over the sale price as determined by a qualified appraisal.
  • Deduction limited to 30% of your adjusted gross income (AGI) with a five year carryover for excess deductions.*
  • Reportable gain on the sale portion.
 
Fund a Charitable Remainder Unitrust with Real Estate  or other Appreciated Assets
  • A portion of your gift will qualify for a charitable income tax deduction.
  • Deduction limited to 30% of your AGI with a five year carryover for excess deductions.*
  • No reportable gain because the trust sells the property tax free.
 
Retained Life Estate
  • A portion of your gift will qualify for a charitable income tax deduction.
  • Deduction limited to 30% of your AGI with a five year carryover for excess deductions.*
  • No reportable gain because WU will sell the property after your life estate ends. 

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