Beneficiary Designations
Not everyone wants to commit to making a gift in their will, which involves working with an attorney. One of the simplest ways to make a gift through your estate is by designating UTSA as a beneficiary of assets such as retirement funds, IRAs, life insurance policies, annuities, and more.
- Contact your retirement plan administrator, insurance company, financial advisor, bank or financial institution for a change-of-beneficiary form.
- Decide what percentage (1 to 100) you would like UTSA to receive and name the University, along with the percentage you chose, on the beneficiary form.
- Return the completed form to your plan administrator, insurance company, bank or financial institution.
The University of Texas System's federal tax ID number is 30-0710145.
Many donors use qualified retirement account assets in their charitable gift planning. This is an easy gift to make and has distinct planning advantages.
Retirement account assets left to loved ones may be subject to higher taxation than other types of assets. By using retirement account assets to make a gift (and selecting alternative assets to leave to family members), you may be able to reduce taxes that otherwise would be imposed on those assets and leave more to your intended beneficiaries.
Contact us for more information about gifts of retirement account assets.
- Instruct your IRA administrator to make a check payable to The University of Texas at San Antonio and mail to us at UTSA Gift Services, One UTSA Circle, San Antonio, TX 78249.
- Up to $100,000 of your gift (annual aggregate limit) qualifies for this favorable tax treatment.
- Your gift makes an immediate impact.
- A qualified charitable distribution from an IRA counts toward your required minimum distribution (RMD) if one is due. Contributions to your IRA after age 70½ can impact the amount eligible for a tax-free transfer.
A New QCD Option to Consider
Starting in 2023, IRA owners age 70½ or older can make a one-time IRA distribution of up to $50,000 to create a charitable gift annuity or a charitable remainder trust. This is an option worth considering if you want to make a gift from your IRA and establish a new income stream.
Please contact us to learn more about planning and completing a qualified charitable distribution, or click here to calculate your required minimum distribution.
Life insurance is also an excellent tool for accomplishing philanthropic goals while realizing other important financial objectives. Life insurance may even allow you to make charitable gifts you never would have dreamed possible.
Making a gift of life insurance is quite simple. If you are the insured policy owner, you simply transfer physical possession of your paid-up policy to us and file an absolute assignment or transfer of ownership form with your insurance company. Your company then will send a letter to us showing that we are the sole owner of the policy.
Hypothetical Example
Emmett owns a $100,000 life insurance policy with a cash value of $40,000. No further premiums are due and he no longer needs the coverage. He can ensure that we will receive $100,000 at his death by making us the beneficiary, or he can transfer ownership of the policy to us now. When he transfers ownership, Emmett receives an itemized charitable deduction equal to the lesser of his cost basis or the policy's replacement value.
Contact us for more information about gifts of life insurance.
Other Charitable Giving Options
These are but a sampling of the different assets and strategies that you may consider using in realizing your charitable legacy. We look forward to helping you discover what is best for you.
A gift annuity is an agreement between you and us. When a charitable gift annuity is in place, we agree to pay you fixed payments for your life (and/or the life of your chosen beneficiary). The amount of the annuity is based on the gift amount and age of the annuitant(s) at the time of the gift.
A gift annuity can be established with a modest contribution and provides a number of very attractive benefits. You can:
- fund it with cash or marketable securities
- qualify for an immediate income tax charitable deduction for the gift (subject to certain income limitations), and
- potentially spread out any capital gains tax liability.
What's more, part of your annuity payment may be free of federal income tax for a certain number of years. As a donor, you can select the payment intervals (usually quarterly) and name the annuitant(s)—one or two persons.
Professionals and other highly compensated employees who frequently max out their annual retirement plan contributions may want to consider a deferred gift annuity strategy. Deferred gift annuities offer three important benefits:
- They can be used to supplement qualified retirement plan savings.
- You qualify for a current income tax deduction now during your high income years.
- You can postpone the start of annuity payments until later—usually after retirement begins.
Now is a great time to consider this giving option as gift annuity rates increased on January 1, 2023.
Sample one-life gift annuity rates effective January 1, 2023
|
Age |
70 |
75 |
80 |
85 |
90 |
|
Rate |
5.9% |
6.6% |
7.6% |
8.7% |
9.7% |
Contact us for more information about charitable gift annuities.
Gifts of long term, highly appreciated securities are the most common type of outright property gift. Donors typically give individual stocks, but bonds or mutual fund shares are also attractive gift options. Outright gifts of securities can be made quickly and these gifts let you do more with your gift because of the very attractive tax benefits.
A charitable gift of appreciated securities held long term is not considered a sale and does not generate any capital gains tax, no matter the amount of the gain. To encourage gifts of appreciated property, Congress provides a valuable tax incentive—a charitable income tax deduction for the full fair market value of the securities (including the gain) for itemizers.
For example, if you give shares of stock worth $10,000, you can deduct the full amount on your income tax return (subject to certain income limitations) even if you bought the stock for $1,000. In addition, when we sell the stock, we keep every penny of the proceeds since we are a tax-exempt organization.
Note: Be sure to transfer the stock directly to us. Do not sell the stock or your will lose this important tax advantage.
Contact us for more information or directly reach the UT System Development and Gift Planning Services to initiate your gift:
Donor advised funds have become an increasingly popular way to realize personal philanthropic goals in recent years. A donor advised fund lets you set up an account with an outright gift and make grant recommendations. It may be a smarter way to give since a donor advised fund may help reduce income taxes, minimize or avoid estate taxes and avoid or defer capital gains taxes. Since your grant comes from funds that have already been set aside for charitable giving, there is no change in the assets you have available to meet daily needs or realize future financial goals.
If you have a donor advised fund account, we invite you to remember UTSA and the ways you can support us at this important time. We are a qualifying charitable organization, eligible to receive your grant.
If you do not have a donor advised fund and are interested in setting up one, you can do so through the University of Texas Foundation to benefit UTSA and other charities of your choice. The University of Texas Foundation’s Donor Advised Fund provides a flexible option for those who want to support the continuing tradition of excellence in the UT System, as well as other philanthropic interests. The Donor Advised Fund operates much liked a small private foundation on whose governing board the donor sits. This arrangement allows the donors to express ideas on how fund distributions will be used (at least 50 percent must be invested in UTSA or other UT System Institutions).
You may take a full income tax deduction on the initial gift amount as well as any additional gifts, to the extent allowed by law. Once the funds are invested you can recommend grants to UTSA or any other of the 14 UT Institutions. There is a minimum contribution of $25,000 and a required minimum annual distribution of 5% of the assets. Contact us to learn more.
Contact us for more information about gifts of donor advised funds.
A donor who gives us appreciated real estate can completely avoid capital gains tax on the appreciation and qualify for a charitable income tax deduction for the full fair market value of the property.
Gift of a Remainder Interest in a Personal Residence or Farm
A special provision of the tax law allows an immediate income tax charitable deduction for a gift of a remainder interest in your home or farm. With a remainder interest gift, you retain an absolute right to occupy the home or farm for your life (or the life of a family member). The property passes to us only after termination of the life estate(s).
The charitable deduction allowable for this future gift is the present value of our right to receive the property at some later date. The age of the life tenant is the primary factor in determining the present value of our deferred interest and the charitable deduction. The gift is deductible in the year of the transfer (subject to certain income limitations and assuming the donor itemizes).
Gift of a Fractional Interest in Real Estate
Federal tax laws let donors take a charitable deduction for gifts of fractional interests in real estate. This type of gift can be especially rewarding when you own a vacation home that you use only part of the year.
Example: Mary and Jim own a $300,000 vacation home that they use for only two months of the year. They can give our institution a 50% interest in the property, qualify for a tax deduction for the value of our interest in the property, and still have a right to use and occupy the property for up to half the year.
Contact us for more information about gifts of real estate.
One method of making a gift with a retained right to income is a charitable remainder trust. Let's look at some of the benefits a charitable remainder trust can provide:
- An income for you and/or your beneficiaries for life or a period of up to 20 years
- An immediate and substantial income tax charitable deduction (subject to certain income limitations) for itemizers
- Potential avoidance of current capital gains taxes when the trust is funded with long-term appreciated property
- Reduction of your assets to reduce or avoid estate taxes
- Substantial reduction of probate costs, taxes, and other estate transfer expenses.
An Immediate Charitable Deduction
A gift to a charitable remainder trust qualifies for an immediate income tax deduction, even though income is to be paid to the donor (and/or other beneficiaries) for life. The exact amount of the charitable deduction depends on the:
- value of the property transferred to the trust
- amount of income benefits that are payable each year to individual beneficiaries
- approximate length of time the income benefits will be paid
- prevailing interest rates at the time the gift is made.
Despite the tax and financial benefits of a charitable remainder trust, you should consider this kind of arrangement only if you and your advisors determine it is compatible with your overall estate, tax, and financial plan.
Contact us for more information about charitable remainder trusts.
An outright gift of collectibles may help reduce income taxes, minimize or avoid estate taxes and avoid or defer capital gains taxes. In the right situation, the full value of the collectible can be deducted.
Contact us for more information about outright gift of collectibles.
