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Planned Giving at St. Scholastica Academy
YOU CAN PLAN GIFTS THAT MAKE A DIFFERENCE IN YOUR LIFE
AND IN THE LIVES OF OUR STUDENTS
SHAPING A LEGACY
Through your caring and generosity, you can help make the 1600-year-old Benedictine tradition of excellence in education both available and vital to future generations of young women. Your legacy to St. Scholastica Academy can help assure that the future will be shaped by the five great Benedictine tenets:
• Love of Learning
• Stewardship of Gifts
• Sense of Balance
• Respect for the Individual
• Importance of Community
A REMARKABLE TRADITION
Excellence in education is at the heart of the Benedictine tradition and at the center of the St. Scholastica Academy experience. You can play a major role in perpetuating this remarkable tradition. By including the Academy in your estate plan, you will help assure that we can continue to provide young women with an outstanding education that prepares them to take their place as strong responsible adults in today’s world.
WHAT YOUR GIFT WILL DO
Today’s economic realities constitute a different and greater challenge than even a few years ago. Your generosity will help us to maintain and increase affordability by limiting tuition increases and providing scholarship assistance. Your gift will help assure that the Academy remains a leader in young women’s education, even as we stay competitively priced. You will help shape the future of St. Scholastica Academy.
HOW YOUR LEGACY CAN HELP MAKE A DIFFERENCE
You can help establish a legacy of caring by naming St. Scholastica Academy in your estate plan. Here are some suggestions:
BEQUESTS
Gifts by bequest help to maintain excellence in our program and facilities. A general bequest transfers a stated amount of money to St. Scholastica Academy. A residuary bequest transfers the residue of your estate, or a percentage of the residue, after all other bequests, debts, and taxes have been paid.
RETIREMENT PLANS
An excellent asset to consider as a bequest is your retirement plan (pension plan or IRA). Because retirement plan assets represent tax-deferred income, the beneficiaries of the retirement plan at your death will normally recognize taxable income when they receive the assets. Because St. Scholastica Academy is tax exempt, we will not pay income tax on retirement assets we receive by bequest.
LIVING TRUSTS
A living trust is created during the grantor’s lifetime. You can add or withdraw assets from the trust, amend it, modify it, or revoke it in whole or in part at any time. On the grantor’s death, the trust becomes irrevocable.
CHARITABLE REMAINDER TRUSTS
This option enables you to transfer gifts of cash, marketable securities, or closely held stock to a trust and in return receive income for life as well as a partial charitable income tax deduction. At your death, the trust assets are transferred from whomever you have arranged to be the trustee to St. Scholastica. There are two types of charitable remainder trusts—the unitrust and the annuity trust. With a unitrust, the amount you receive as income is a set percentage of the value of the trust assets, redetermined annually. The charitable remainder unitrust may therefore provide some measure of protection from inflation. For donors who want a fixed annual payment, the annuity trust is an attractive option. You will receive fixed annual payments in an amount agreed upon by you and the Academy in the initial agreement. The annual installments remain the same throughout your life assuming the sufficiency of the annuity trust assets. The most advantageous use of the charitable remainder trust involves the transfer of highly appreciated property. Highly appreciated property can be transferred to a charitable remainder trust tax-free, and since the trust is tax-exempt, it can then sell the appreciated property tax-free and reinvest in other assets. Because of these tax advantages, the sale and reinvestment of property within a charitable remainder trust can be a very attractive alternative to a typical outright sale of the property.
MARKETABLE SECURITIES
Stocks and other securities transferred to St. Scholastica Academy are tax deductible at their fair market value. Donors are not required to pay capital gains taxes on appreciated securities that have been held for more than one year before being donated.
LIFE INSURANCE POLICIES
Gifts (absolute assignment) of fully paid policies or policies for which you are still paying premiums are welcome. You can also name St. Scholastica Academy as the beneficiary of your life insurance policy while still retaining ownership of the policy.
CERTIFICATES OF DEPOSIT
Name St. Scholastica Academy as the beneficiary.
PERSONAL PROPERTY
Donate antiques, collectibles, jewelry. The proceeds of the sale of the items benefit the Academy.
To make a gift call Vakarie Christian at (773) 764-5715, x359, or email her at vchristian@scholastica.us For you, and for all our benefactors, we are extremely grateful. You are always in our prayers.
REASONS TO HAVE A WILL—AND TO UPDATE IT
If you own property and are concerned about who will ultimately receive it, you need a will. Without a will, the state decides who gets what according to its rules. With a will, you can express your own values and wishes, designating for example the special persons, institutions, or causes dear to you. With a will, you can also name an executor to handle your estate or you can create a trust. A will can also help reduce taxes and other costs.
If you are among the estimated more than 50% who have no will, make an appointment with your attorney, or have a relative or friend recommend one. Before the appointment, write down what you want the will to accomplish. After the will is completed, keep it in a safe place, and give a copy to your executor.
Review your will periodically. Some of the factors that may require changing your will include:
- moving to a different state,
- marriage or divorce,
- a designated beneficiary dies or his/her needs change,
- your executor or trustee dies,
- a child or grandchild is born or reaches adulthood,
- changes in your assets, or
- a decision to make further bequests.
Small changes can be made to wills by adding an amendment. Those who already have a will often think that adding a beneficiary will involve a lot of time and expense, but such need not be the case.
Also, if you want to make sure items of personal property pass to the right person, you can prepare a letter of instruction to the attention of your executor. In this letter, you can direct certain items to a specific beneficiary, such as “my wedding ring to my daughter, Susan.” This can prevent disputes over the division of items in your estate as well as enable you to know your property will go to the person for whom it has meaning. You can write such a letter yourself and revise it whenever you think necessary, since it is not a legal document. Major changes, however, may require a new will. As always, consult your attorney.
GIFTS OF STOCK
A gift of appreciated stock can become a gift that benefits both you as donor and St. Scholastica as recipient. If you have stock that has appreciated in value, especially if it is not paying any dividends, donating it may result in a significant tax break for you and have a significant impact on the students here at SSA.
In contrast, if you keep the stock, it increases the dollar value of your estate, which could increase the cost to your heirs.
Here are reasons why stock is often the gift asset of choice for donors who want to make a greater impact with their charitable giving:
Simplicity and convenience. Stocks are easy to give. Unlike some other forms of gifts, such as real estate, the amount of paper work and time involved is minimal. Completing a stock transfer usually will just involve conveying SSA’s information to the custodian of your stock with your directions.
You have control over the size and amount of your gift. With a collectible or real estate, the donation is usually all or nothing. The asset cannot be easily divided. With stock, however, you select the number of shares you wish to donate.
There are few valuation and basis problems. With many other gifts, valuation can be subjective, which means it may also be subject to question by the IRS. With publicly traded stock, however, the value can easily be determined and documented.
The tax benefits can be greater than a gift of cash. In fact, donating appreciated stock provides a double tax benefit for you that can save you taxes.
Example: Let’s say you donated 100 shares of stock with a fair market value of $5,000 and completed the transaction prior to year-end. Assuming you bought the stock more than one year ago for $1,000, you could deduct the full $5,000 on your 2006 income taxes (subject to broad limitations). If you are in a 33% tax bracket, that could reduce your 2006 tax liability by $1,650. Plus the $4,000 in gain was not taxed to you, even though it had “inflated” the charitable donation. If you had sold the stock and donated $5,000 in cash, we would very much appreciate it, and you would receive the $5,000 charitable deduction. But from a tax savings point of view, the stock gift is the more efficient tax option because you avoid capital gains taxes.
The bottom line. Donating long-term appreciated stock to SSA not only benefits you, but also provides a gift to us that is truly appreciated and helps us achieve our goals and serve our mission of college-preparatory education for girls.
If you have a stock you would like to use as a charitable gift, let us hear from you. The directions for executing such a gift are simple. Please contact Vakarie Christian at 773-764-5715 ext 359.
The information provided illustrates general concepts and ideas in tax and estate planning. The articles are not intended as legal services or advice. You should consult with competent tax and legal professionals as to the applicability of any items to your personal situation.
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