Often called "Life Income Gifts," these types of planned gifts combine your financial and philanthropic goals in a way that improves both. When you make a life income gift to USF, rather than being put to use right away, your gift is invested in the USF Foundation or a financial institution of your choosing. Every year, a predetermined amount of the investment growth of your gift will be returned to you, your spouse, or your choice of another beneficiary. When you or the last beneficiary dies, the gift (plus any growth) will be available to the USF Foundation to fund the scholarship, research, or program that you designated when you first made the gift.

Life income gifts may seem complicated at first, but they can be as straightforward as a Charitable Gift Annuity, which only involves a simple, two page agreement. You make a gift. In return, USF agrees to pay you a set income for the rest of your life. Period. It's that simple! Or they can be designed to accommodate even the most complicated estates, allowing the flexibility to choose a rate of return, control the investment of the assets, make additional contributions, or change charitable beneficiaries.

The best tax attorneys and financial advisors consider life income gifts to be one of the most powerful estate planning tools to offer clients and their families. Consult with a USF Planned Gift Officer at either giving@sar.usf.edu or (941) 359-4582, or your estate planning professional, to find out whether a USF life income gift might be right for you.

Charitable Gift Annuities
The easiest life income gift, a Charitable Gift Annuity involves only a two page agreement. When you make a gift to fund a USF Charitable Gift Annuity, the university agrees to make fixed payments to you every year for the rest of your life. The amount of your payment is determined by the gift amount and your age. The higher your age, the higher your payment will be. Payments can be made to you, another person (such as your spouse), or two people. Your payment is guaranteed to stay the same and is backed by the assets of the University of South Florida Foundation.

Though it may not be as complex as the Charitable Remainder Trust, the Charitable Gift Annuity provides many of the same income tax and capital gains tax benefits. And unlike Charitable Trusts, Charitable Gift Annuities involve no startup costs, trust administration fees, or investment management decisions.

Consider using appreciated stock to fund your Charitable Gift Annuity. You will enjoy significant capital gains tax savings, in addition to the income you receive. A Charitable Gift Annuity is a great way to turn a stock that has performed well into a comfortable income for you and your family.

Charitable Remainder Trusts
Like other life income gifts, Charitable Remainder Trusts pay an income back to you or a person you choose. There are two types of Charitable Remainder Trusts: the Charitable Remainder Unitrust and the Charitable Remainder Annuity Trust. Both trusts offer considerable flexibility and attractive tax benefits. You will receive an income tax charitable deduction, avoid capital gains tax on appreciated securities or real estate transferred to the trust, and lessen estate taxes, if applicable.

Deciding which of the two trusts is right for you depends on how much income you need and your tolerance for investment risk or reward.

Charitable Remainder Unitrust
A Charitable Remainder Unitrust is like a combination of a gift and an investment plan. You place assets in trust and you (and/or another beneficiary) receive lifetime income from them, then the university receives the remainder. With a unitrust, the amount you receive as income is a set percentage of the value of the trust assets, redetermined annually.

You also have the option of choosing a unitrust with a net income plus make—up provision. That way, in years when the actual yield is below the stated percentage, you receive only that amount. Then later, when performance is better, those deficiencies are made up.

This option is excellent for devising a supplemental retirement plan.

Charitable Remainder Annuity Trust
If you're uncomfortable letting your future retirement dollars ride the ups and downs of the stock and bond market, try a charitable remainder annuity trust.

This plan will pay you a fixed dollar amount every year for the rest of your life, with no investment worries or responsibilities. Then after your lifetime (and the lifetime of a surviving beneficiary, if desired), the trust remainder is available to support the university.

Inheritance Preserving Charitable Remainder Trusts
If the benefits of a Charitable Remainder Trust sound good to you, but you are concerned that your children or family will not receive enough of an inheritance, then you should consider a special type of Charitable Remainder Trust that uses Life Insurance to "replace" the inheritance that will be going to USF. Also called "Wealth Replacement Trusts" or "Life Insurance Trusts," these trusts are very popular because they can produce impressive results both for your heirs and for USF. This arrangement involves creating either a Charitable Remainder Unitrust or a Charitable Remainder Annuity Trust just as you would normally. The difference is, instead of receiving the income from the trust yourself, you direct that some or all of the trust income go to pay life insurance premiums on policies purchased to benefit your children or family. So why would you consider this complicated arrangement? Because for some people with very large estates, the tax consequences of such a gift can result in making a "free" gift to the University of South Florida. If the circumstances of an estate are conducive, a situation can arise where the heirs receive exactly the same amount regardless of whether you make a $1 million gift to the university or not. Therefore, if your family and the University of South Florida are both important to you, there is often a way to create a win-win situation and give a generous gift that both will appreciate.

For more information on any of the income producing gifts please call USF Sarasota-Manatee Advancement Office at (941) 359-4582 or email your questions to giving@sar.usf.edu.