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 Through
effective gift planning, you can balance your personal financial
goals with your charitable interests—and realize significant
tax benefits. UCSB's gift planning office can work with you and/or
your financial and legal advisors on all types of planned gifts,
ranging from a simple bequest in your will to various life income
gift plans.
Use the form at the
bottom of this page to request more information.
Through gift planning, you can realize some
or all of the following benefits:
- Reduce or eliminate taxes on capital gains
- Convert low-yielding assets to a higher income stream
- Obtain a current income tax charitable deduction
- Provide life-long income for yourself or another beneficiary
- Eliminate or reduce federal estate taxes
- Secure free professional management of assets
- Supply additional retirement income
- Pass assets to heirs with a minimum of transfer taxes
- Furnish important long-term support for UCSB
Deferred Gifts and Life Income Gift Options
- Bequests
- Sample Bequest Language
- Life Income Gift Options
- Charitable Remainder Trusts
- Charitable Gift Annuities
- Deferred Payment Gift Annuities
- Pooled Income Funds
- Other Gift Planning Options
- Charitable Lead Trusts
- Retirement Plan Assets
- Real Estate
- Treatment of Capital Gain
- To Request Information
Bequests
Many of our friends elect to support UCSB by means of a bequest.
These gifts may be made either by will or through a living trust.
Because bequests do not take effect until death, a donor retains
control and use of the property during life, but they have the
benefit of knowing that they have provided for UCSB. Bequests
may be of a specific dollar amount, a percentage of an estate,
or the residue of an estate, and may be:
- Designated for a particular purpose or left unrestricted
- Used to establish or add to an endowed fund (only income is
used and principal is held in perpetuity) or a current fund
(both income and principal may be used)
- Made to honor the name of the donor or memorialize the name
of a loved one
Sample Bequest Language
Bequests should be made to the "UC Santa Barbara Foundation." The
UC Santa Barbara Foundation is devoted exclusively to the financial
support of the Santa Barbara campus. If you decide to make a
bequest to UCSB, the following language may be useful to your
attorney:
I give, devise and bequeath to the UC Santa Barbara Foundation: the
sum of __________dollars ($_____); or the following described
property, to wit: _______________________ or _____percent (__
%) of the rest, residue and remainder of my estate to establish
the (Name) FUND, as an endowed (or a non-endowed) fund, the
income only of which shall be used (if non-endowed, the principal
and income of which shall be used) for the following purpose:
[insert exact purpose here; i.e. scholarships, fellowships.
research, etc.]
In making this gift it is my intention to serve the Santa
Barbara campus of the University of California and its students
and I desire that the foregoing statement of purpose be liberally
construed so that this objective may be fully accomplished.
If, at any time in the judgement of the Chancellor of the Santa
Barbara campus of the University of California, changed circumstances
substantially interfere with the beneficial realization of such
purposes, then the funds may be used for such other similar
purposes as the Chancellor of the Santa Barbara campus of the
University of California in his/her discretion determines to
be consistent with my interests and intentions.
We encourage you to contact the UCSB Development
Office for specific bequest language. This will ensure
that your gift will be used in accordance with your wishes.
LIFE INCOME GIFT OPTIONS
Several gift plans offer the opportunity for the donor (or a
designated beneficiary) to receive income for life while making
a significant contribution to UCSB.
Charitable Remainder Unitrusts
A separate trust that pays the income beneficiary a percentage
(at least 5%) of its net asset value each year. The trust is revalued
annually. An income tax charitable deduction is allowed for the
value of the remainder interest of the trust. A popular variation
of this trust is the "net income" unitrust, which distributes
the trust's net income, up to the set percentage of the annual
market value of the trust assets. This protects the trust corpus
from erosion due to high income payments. These separately invested
trusts may be established with a minimum gift of $100,000; additional
contributions can be made to a unitrust at any time.
Charitable Remainder Annuity Trusts
This plan pays a fixed dollar amount (at least 5% of initial
value of transferred property) to the donor for life. A charitable
contribution deduction is allowed for the value of the trust's
remainder interest. Like the unitrust, an annuity trust may be
established with a minimum gift of $100,000. However, annuity
trusts cannot accept additional contributions.
Charitable Gift Annuities
Provide a fixed annuity for the life of the income beneficiary.
The rate is based on the age of the income beneficiary on the
date of gift, and part of each payment is usually tax-exempt.
The amount of the charitable contribution deduction is basically
the difference between the value of the gift (cash or the value
of securities or real estate) and the value of the annuity. Gift
annuities may be established with $10,000 or more. A chart of
sample rates follows.
| Age of Donor |
Annuity Rate |
| 65 |
6% |
| 70 |
6.5% |
| 75 |
7.1% |
| 80 |
8% |
| 85 |
9.5% |
| 90 |
11.3% |
Deferred Payment Gift Annuities
Like the gift annuity, this plan also pays a fixed amount, but
the first payment is deferred for a year or more from the date
of the gift and is usually timed to coincide with retirement or
other plans. The donor is thus able to make a gift now and use
the income tax charitable deduction while in a higher tax bracket,
deferring payment until those years when the beneficiary may need
the income more. The amount of each payment that will be tax-free
depends on the rules in effect when the payments begin. The charitable
contribution is the face value of the gift less the actuarial
value of the deferred annuity. The minimum donation is also $10,000.
A chart of sample rates follows.
| Age Gift Made |
Age Payments Begin |
Annuity Rate
| |
| 40 |
55 |
14.2% |
| 50 |
60 |
11.1% |
| 40 |
60 |
19.4% |
| 50 |
65 |
15.3% |
| 40 |
65 |
26.8% |
| 50 |
70 |
21.7% |
Pooled Income Funds
These funds are comprised of the donations of many donors, which
are combined for investment purposes. The two pooled income funds
to which donors may make gifts to benefit the University of California,
Santa Barbara are operated by The Regents of the University of
California and are open to donors to any campus. These funds pay
the donor or a designated beneficiary a pro rata share of the
particular pooled income fund earnings each year for life. Income
is taxed as ordinary income, and a charitable deduction is allowed
for the value of the remainder interest. Pooled income funds may
be started with as little as $5,000 and additional contributions
of $1,000 or more may be made at any time.
OTHER GIFT PLANNING OPTIONS
Charitable Lead Trust
A charitable lead trust is a way to make a gift to UCSB and to
transfer assets to heirs at a reduced gift tax cost. The concept
is simple: you transfer cash, securities or other property to
a trust to last a set number of years and designate The UCSB Foundation
as the income beneficiary; later the trust property reverts to
your heirs, either outright or in trust. A charitable lead trust
can be used to greatly reduce or completely eliminate the gift
tax cost of transferring wealth to children or grandchildren.
In addition, any future appreciation on the property can be channeled
to heirs without incurring further gift or estate tax liability.
Given the size of gift and estate taxes, the savings that can
be achieved through use of a charitable lead trust can be especially
significant.
Retirement Plan Assets
Assets in a qualified retirement plan are usually subject to
both income and estate taxes at the death of the plan beneficiary.
It is not unusual for the combination of these taxes to erode
as much as 80 percent of the plan's assets. This tax situation
makes such assets an excellent choice for funding either bequests
or testamentary charitable trust plans. UCSB's gift planning office
can provide you with specific information about how such a gift
might offer you the opportunity to make a significant gift to
the University at a very low "cost" to your heirs.
Real Estate
A gift of real estate is often an effective way to make a significant
contribution to the University. An outright gift of real property
entitles the donor to an income tax deduction for the property's
full appraised fair market value. Real estate can also be used
to fund Charitable Remainder Trusts, enabling donors to
turn this type of asset into a steady income stream without incurring
capital gains taxes.
A home (including a second or vacation home) or farm may be given
to UCSB, subject to the right of continued use by the donor and/or
other individual(s). This arrangement is called a Retained
Life Estate. The arrangement can be for life or a set number
of years; once the tenancy is completed, UCSB will own the property
outright. A portion of the appraised value of the home or farm
is tax deductible in the year the gift is made.
All potential gifts of real property must be evaluated by University
representatives to assess environmental soundness and marketability.
Treatment of Capital Gains
Donors to charitable remainder trusts and pooled income funds
may make a gift using appreciated property without having to incur
capital gains taxes. The trust can sell those assets and purchase
other higher yielding assets also without capital gains taxes.
Capital gains on donations to gift annuities are usually deferred
over the beneficiary's life expectancy.
FOR MORE INFORMATION
Calculations, which illustrate some of the benefits of various
life income arrangements, and more detailed information about
all of these life income plans, are available from:
Victoria Wing
Director of Major Gift Planning
UCSB Development Office
University of California, Santa Barbara
Santa Barbara, California 93106
(805) 893-5556
Victoria.Wing@ia.ucsb.edu
To request more information about planned giving
opportunities at UCSB, please complete the following.
Please know that any information you submit will be kept by
UCSB in the strictest confidence. The University of California,
Santa Barbara, as a public agency, is required to comply with
state and federal law in regard to the ways in which it uses
personal information it has about individuals. UCSB does not
use, share, sell, rent, or otherwise release any of the UCSB
data to outside institutions, and will not at anytime in the
future.
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