Thank you for your interest in learning more about how to establish a planned gift for the University of Michigan School of Natural Resources and Environment. The following is a brief outline on the planned giving opportunities that you may want to consider as you formulate your financial and estate plans. Many benefactors of the University have found that using one or more of these techniques allowed them to meet both their personal financial objectives and their philanthropic goals. Through proper planning they were able to maximize tax benefits for themselves, provide for their individual and family financial needs and establish meaningful gifts to support the charitable causes they cared most about.

We would be delighted to explore planned giving with you, and we encourage you to discuss the application of the following planned giving approaches with your attorney or tax advisor.

Bequest or Beneficiary Designation
Charitable Remainder Unitrust
Charitable Remainder Annuity Trust
Charitable Gift Annuities
Charitable Lead Trust
Donor Pooled Income Fund
Gift of IRA of other Retirement Assets

A bequest is a method of leaving a charitable gift from your estate by naming the University as a beneficiary in a will. You may also name the University as beneficiary on beneficiary designation forms of certain accounts such as IRAs and annuities. Our preferred bequest language can be incorporated into a will or living trust to designate the University of Michigan School of Natural Resources and Environment as a legatee of your estate. Our preferred beneficiary designation language can likewise be incorporated on beneficiary designation forms for IRAs, annuities and similar accounts. The suggested wording can be adapted to meet your desired gift intention, i.e., a bequest or beneficiary designation for a particular department/program at the School, such as student scholarship support.

For more information about Bequest or Beneficiary Designation please visit www.giving.umich.edu/howto/planbeq.htm

Charitable Remainder Unitrust

A charitable remainder trust is a way to make an irrevocable gift to the University of Michigan, receive some immediate tax benefits and still receive annual income distributions from the assets during your lifetime(s). Upon the death of the last beneficiary, the trust principal becomes the University's and will be used according to your specified instructions. If you are interested in income growth as a hedge against inflation, the charitable remainder unitrust provides the potential for increased distributions over the life of the trust. The trust assets are valued annually. Payments to you or your designated beneficiary(ies) are typically made as a predetermined percentage of the value of the trust assets. Any growth in the trust over the annual distribution is added to the trust's principal. As the trust assets grow, so do payments to you or your designated beneficiary(ies).

For more information about Charitable Remainder Unitrust please visit www.giving.umich.edu/howto/plancrt.htm

Charitable Remainder Annuity Trust

A charitable remainder annuity is a way to make an irrevocable gift to the University of Michigan, receive some immediate tax benefits and still receive annual income distributions from the assets during your lifetime(s). Upon the death of the last beneficiary, the trust principal becomes the University's and will be used according to your specified instructions. A charitable remainder annuity trust is most attractive to people who want a fixed distribution. Each year the trust will distribute the payout amount determined at the time the trust is established. This amount is paid every year for the life of the beneficiary (ies), regardless of whether the trust grows or declines in value, as long as the trust is solvent.

For more information about Charitable Remainder Annuity Trust please visit www.giving.umich.edu/howto/plancrt.htm

Charitable Gift Annuities

Michigan alums can now take advantage of this very popular charitable giving opportunity that provides a fixed income for life. Charitable gift annuities have been in existence for more than 100 years and are one of the most simple life income plans available. An ever-increasing number of non-profits are offering annuities because they are so easy to understand and to establish.

For more information about Charitable Gift Annuities please visit www.giving.umich.edu/howto/plancga.htm

Charitable Lead Trust

A charitable lead trust is a vehicle for transferring substantial assets to your children or others while minimizing transfer taxes. By permitting the income from those assets to go to a charitable institution like the University of Michigan for a period of time gift and estate taxes may be greatly reduced. The annual distributions are available to the charity immediately. At the end of the trust period, the remaining principal is distributed as you directed to your chosen beneficiary(ies), usually your children or grandchildren.

For more information about Charitable Lead Trust please visit www.giving.umich.edu/howto/planlead.htm

Donor Pooled Income Fund

The Donor Pooled Income Fund provides a way for you to 1) make an irrevocable gift to the University, 2) receive the tax benefits of a charitable gift, and 3) realize a modest return on those assets for the rest of your life, and/or the lives of other beneficiaries. Income from the Donor Pooled Income Fund is treated as ordinary income and is based on the number of units of participation you own. The Fund is valued quarterly and you receive income in four quarterly distributions each year. Following the death of all income beneficiaries, the number of units owned will be severed from the Fund and the value of those units will be distributed to the School of Natural Resources and Environment according to the purpose you designated at the time of the gift.

For more information about Donor Pooled Income Fund please visit www.giving.umich.edu/howto/plandpif.htm

Gift of IRA of other Retirement Assets

For many, money accumulated through the years in retirement plans represents a significant percentage of their total assets. Even with the minimum distribution rules for mandatory withdrawal, many of these plans will still have large balances at the death of the owners.

People are often very surprised to discover that assets they thought would simply pass to heirs from their qualified retirement account are the most heavily taxed assets in their estate. A combination of estate taxes, income taxes and generation-skipping transfer taxes can consume nearly 80% of a retirement plan account. There are ways to avoid, or significantly reduce, these taxes.

If you are interested in supporting Michigan through a bequest, a qualified retirement plan or IRA may be the best asset to designate to the University. If you make the University the beneficiary of your retirement plan, you would eliminate the income tax, generation-skipping transfer tax, and the estate tax on the funds in the plan. The University would receive 100% of the retirement assets; by contrast, if you left these same assets directly to heirs, they may receive as little as 20%. Even with the 1997 repeal of the 15% excise tax on retirement accounts they remain the most heavily taxed asset in your estate.

If you wish to benefit your heirs before transferring your assets to charity, you may designate a testamentary charitable remainder trust as beneficiary of your IRA or other qualified retirement plan. Upon your death, the plan balance will be distributed to a charitable remainder trust which will pay income to your heirs for their lifetimes, or for a period of years. Upon their deaths, or when the trust term is completed, the remaining trust principal will be transferred to the University. With this strategy some income tax is avoided, the estate tax is reduced, heirs may enjoy a greater percentage of the proceeds, and you have provided a substantial gift to the University.

For more information about Gift of IRA of other Retirement Assets please visit www.giving.umich.edu/howto/planret.htm