Planned Giving Options: Gifts that Generate Income

There are several ways for you to contribute to UMDNJ now while retaining income for your lifetime and/or members of your family. Such gifts enable you to provide for a surviving spouse, fund educational expenses or create a source of income for loved one.

Charitable Remainder Trusts:
To make a substantial gift to the University and receive income for you and/or your designee, consider an irrevocable transfer of cash or property to a trustee such as the Foundation of UMDNJ. Income from the trust is paid to you and/or other beneficiaries for life or a term of years. The remainder interest in the property then passes to the Foundation for the benefit of UMDNJ. A portion of the contribution is tax-deductible in the year of the gift, and a portion of the annuity will be tax-free. With appreciated property, tax on the gain is reduced.

Charitable Remainder Unitrust (CRUT) provides that a fixed percentage (at least 5% of the fair market value of the assets in trust, computed each year) be paid to you and/or your beneficiaries at least once a year. In a unitrust, however, the amount paid to the beneficiaries will vary on a yearly basis according to the annual reevaluation of the trust principal.

Charitable Remainder Annuity Trust (CRAT) works just like the CRUT described above, except that the payments from the trust are in a fixed amount (annuity). Payments are made at least once a year to you and/or your beneficiaries for their lifetime(s) or for a term of years not to exceed twenty.

Charitable Gift Annuity:
In exchange for your gift of cash, marketable securities or real estate in the amount of $10,000 or more, the Foundation agrees to pay you and/or your beneficiaries a specified life annuity. You decide whether you want an immediate annuity, with payment to begin not later than one year from the date of the gift, or a deferred gift annuity, when payments begin at a specified future date. Charitable Gift Annuity rates are determined by your age at the time you open the annuity; the older you are the higher the rate. Currently, charitable gift annuity rates are higher than current market rates.

Charitable Lead Trusts provide income-either a percentage or a specified amount-to UMDNJ for a specific number of years. At the termination of this period, the principal is returned to you or your designees.

Real Property Subject to a Life Estate:
Under an agreement to donate real property subject to a life estate, you many transfer a personal residence or farm to the Foundation of UMDNJ, while retaining a life estate (the right to use the property for the remainder of your life). You are entitled to a federal income tax deduction for the firm market value of the reminder interest in the property at the time it is transferred.

To discuss gift and estate planning strategies or to receive a packet of information about Planned Giving, call toll-free at (866) 44 UMDNJ.

NOTE: The information contained in this Web site does not constitute tax or other legal advice. For tax or other legal advice, you should consult your own advisers.