ACES Office of Advancement

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Bequests

What Is It?

Bequests allow you to leave a gift to ACES at the time of your death via your will, trust, or a beneficiary designation. Many donors find that a gift through a bequest allows them to increase the size of their donation because no funds are given away until the donor no longer needs them.

When Might a Bequest Make Sense?

Bequests allow donors to ensure that their legacy lives on with a cause they have supported during their lifetime or that they have been unable to support due to competing financial demands. Bequests allow donors the flexibility to change their minds at any time and to make future commitments today without having an impact on their lifestyle.

Is an Income Tax Deduction Available for a Bequest?

Gifts made via bequest are not eligible for an income tax deduction because of the revocable nature of the gift. However, if the estate is subject to estate taxes, the amount that goes to the UIF is exempt from them. Retirement plan assets that are gifted via bequest to the UIF are exempt from estate taxes, and the heirs do not have to pay income taxes on them. This unique provision in the law makes retirement plan assets particularly attractive assets to consider when making a bequest.

What are the Benefits?

  • A legacy to programs you supported during your lifetime to continue after your death
  • Reduced estate taxes. Estates over $5 million for individuals dying before January 1, 2013 are subject to federal estate taxes.  Congress has not passed legislation regarding estate tax provisions after this date.
  • No income taxes on retirement plan assets gifted via bequest to charity
  • Flexibility to change your mind about a charitable gift intention to reflect your personal situation

Are There Assets to Consider in Funding a Bequest?

Retirement plans such as 401(k)s, 403(b)s, 457, and 401(a) plans, and individual retirement accounts (IRAs) are particularly attractive assets to consider gifting to charity at death because the tax treatment of retirement plans will be particularly disadvantageous for your heirs. However, almost any asset can be used to fund a bequest gift. Additional assets to consider include cash, securities, real estate, and life insurance.

Questions?

Contact the College of ACES Office of Advancement at 217-333-9355 and ask to speak with a major gift officer.