Deferred gifts are contributions that cannot be used by the School until some future date. Deferred gifts are the result of careful planning that integrates the donor's charitable gift into his or her overall financial, tax, and estate planning objectives in order to maximize the benefits for both the donor and the School. Each of the deferred gifts described below is closely regulated by law and requires special arrangements and tax treatment.


Quick Navigation Links

• Bequests
• Charitable Remainder Annuity Trust (CRAT)
• Charitable Remainder Unitrust (CRUT)
• Pooled Income Funds
• Charitable Gift Annuity
• Deferred Gift Annuity
• Retained Life Estates
• Retirement accounts
• Life Insurance
• Charitable Lead Trusts

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Bequests (in a Will or Living Trust)
The most common form of planned giving, a bequest is made through a will or living trust. Bequests may be stated as a percentage of the estate, as the residual of the estate, or for a specific dollar amount. Since a will can be changed, no income tax benefits are associated with a bequest. However, the owner's estate is reduced by the amount of the bequest for estate tax purposes. Top

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Charitable Remainder Annuity Trust (CRAT)
A CRAT may be funded through a gift of stock, cash, or other assets. This type of gift provides for a predictable, fixed life-long income for the donor and his or her beneficiaries. No additional contributions may be made to a CRAT; however, additional annuity trusts may be established. The donor may claim a tax deduction for the estimated proportion of the assets that will ultimately go to the School. Top

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Charitable Remainder Unitrust (CRUT)
A CRUT is very similar to the CRAT outlined above. The trust provides yearly, fluctuating income to the donor or his/her beneficiaries for a specified number of years, or for life. Additional contributions may be made to the trust, and upon the death of the last beneficiary, the School receives the principle and uses it in accordance with the donor's wishes. The estimated remainder is tax deductible.Top

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Pooled Income Funds
A donor's gifts of cash, securities, or other assets to the School's Pooled Income Funds are combined with the contributions from other donors and invested jointly in a diversified portfolio. The donor receives the income from the fund proportionate to the value of his or her contribution and an income tax deduction based on the estimated principle that will be left to the School. Top

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Charitable Gift Annuity
A Charitable Gift Annuity is a contract between the School and the donor whereby the School agrees to pay a fixed annuity to a maximum of two beneficiaries (immediately or deferred) in exchange for the irrevocable transfer of assets by the donor to the School. A portion of the annuity payment may be income tax-free, and an income tax deduction may be allowed for the difference between the value of the gift and the present value of the annuity.Top

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Deferred Gift Annuity
As with the Charitable Gift Annuity, a donor makes a gift now and receives an immediate income tax deduction. However, in this instance the donor begins receiving the annuity payments at a future pre-determined date. Due to the compounding of the gift's income, the amount of the annuity payments can be significantly greater than the annuity payments under the Charitable Gift Annuity.Top

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Retained Life Estates
A donor may transfer the ownership of a personal residence or a farm to the School, while retaining the right to live there for the remainder of his, or her, life. The donor will be entitled to a charitable income tax deduction for a portion of the appraised fair market value of the property at the time of the transfer. In addition, the donor escapes capital gains tax on the property's appreciation and the estate will be entitled to a charitable tax deduction. Top

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Retirement Accounts
A donor may name the School the beneficiary of the account with the value being fully deductible for estate tax purposes. Income in respect of a decedent is avoided since the University is tax-exempt. Top

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Life Insurance
The School can be named the beneficiary of a life insurance policy to create a gift of much greater value than the actual money paid by the donor. A donor may contribute a "paid up" policy to the School and receive an income tax deduction equal to the policy's cash value. Or, a donor can name the Foundation as the beneficiary of the policy resulting in estate tax savings. Or, a donor can name the School owner and beneficiary of a new policy and receive an income tax deduction for the premiums paid. Top

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Charitable Lead Trusts
With a Charitable Lead Trust, the School receives income from the donor's assets for a specified period of time, after which the asset is transferred back to the donor or to the donor's heirs. A lead trust can reduce gift and estate taxes or provide a charitable deduction for the donor. Gifts intended for use by the School are made to the University of Illinois Foundation and designated by the donor for the School of Applied Health Sciences, a particular department within the School, or a fund established for a particular purpose within the School.Top

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