As a Christ-centered institution, Warner Pacific University provides a solid foundation for students to flourish. Your gift will help provide the necessary resources for our students to thrive, academically, spiritually, and relationally.
Establishing a permanent endowment in your name or the name of a loved one is a wonderful way to create a legacy, as well as provide ongoing funds to Warner Pacific University. With this type of fund, a percentage of the earned income is used to carry out the purpose of the endowment while the principal remains intact.
To learn more about setting up an endowment and for information on the various programs and capital projects that are available for naming opportunities, please contact Robin Beavers at 503.517.1220 or email to firstname.lastname@example.org.
The A.F. Gray Society: A legacy of Christian higher education
Every so often, you may stop to consider the impact your life has on people around you. We’d often like to give more money to our favorite charitable causes, but there simply aren’t enough resources to spare. But what if you could make a lasting and permanent gift, bigger than you dreamed possible, and do it in a way that also honors and protects your loved ones’ inheritance?
To create this kind of legacy, the A.F. Gray Society was established by Warner Pacific University, allowing us to thank a special group of people who have included the University in their future giving and estate plans.
How to become a member of the A.F. Gray Society
Becoming a member is simple. Either call or write to tell us you’ve included Warner Pacific as a beneficiary in your estate planning, or simply ask for a copy of the A.F. Gray Society brochure for more information.
For more information about including the University in your future plans, call 503.517.1220 or email email@example.com. When you call or write, please indicate the following:
- I am considering becoming a member of the A.F. Gray Society.
- I have already placed the University as a beneficiary of my estate plan.
- I would like copies of the “Will and Trust Planning Guide” and/or “Estate Inventory Form.”
- I would like to speak to someone about estate planning.
Need more information about estate planning?
If estate planning is something you’re thinking about for the first time, or if you need to update an older plan, we have resource material, and people, available to help. To get you started, Warner Pacific provides a free “Will and Trust Planning Guide” and “Estate Inventory Form.”
As a member of the A.F. Gray Society, you have the option to designate where your support ultimately goes. For instance, you could help underwrite:
- Scholarships for young people
- Capital expansion
- Computer equipment
- Where need is greatest
In addition, staff members are well-versed in the technical aspects of business transition, retirement, and estate planning. While the University cannot serve as your legal counsel, our staff are trained to help you:
- Sell your business while minimizing capital gain tax
- Protect the way in which your loved ones receive their inheritance
- Minimize taxation on retirement plans
- Reduce or eliminate estates tax
- Include philanthropy in your planning decisions
As we work together to create a legacy of Christian higher education for young people in our community who most deserve our assistance, the financial future of organizations such as Warner Pacific University will largely be determined by a willingness to make future gifts through estate plans.
One of the most popular forms of life income arrangement, a gift annuity offers many advantages. First, and foremost, the payout rates for gift annuities are generally quite attractive to people in their 70s, 80s, and 90s. The rates typically range from 6-11%. If a person, or couple, is currently experiencing a low return on their CDs, money market accounts, treasury notes, or bond funds, a gift annuity can be a nice alternative. The payout rates are determined by a person’s age, and once established are fixed for life.
Second, the donor receives a generous income tax deduction for the year in which they create a gift annuity. Often the tax deduction is 20-50% of the amount that they placed into the annuity.
And finally, depending upon how the gift annuity is funded, the donor can enjoy a significant portion of the income they receive from a gift annuity on a tax-free basis.
There are many forms of gift annuities. Some offer an immediate payout option, while others allow the donor to fund the agreement and get an income tax deduction now, but delay the beginning of payments until some point in the future of their choosing.
Call the University if you are interested to learn more about gift annuities. A confidential illustration can be prepared specifically for you which will reveal what your payout rate would be, how large your income tax deduction amount would be, and what portion of your payments would be tax-free. There is no cost or obligation to inquire.
Annuities and Trusts
Charitable Remainder Trusts (CRTs) can be one of the most powerful planning tools available to people do retirement and estate planning.
CRTs afford the donor potentially five favorable tax outcomes by virtue of one financial transaction. They are: 1) capital gain tax avoidance 2) income tax deduction, 3) tax-free compounding 4) income payments taxed favorably, and 5) estate tax elimination (for those people with larger estates).
- Capital Gain Tax Avoidance allows people to place an asset(s) in a CRT and avoid paying initial capital gain tax in the process. For example, if you paid $100,000 for some property that is now worth $500,000 you can sell the property through a CRT without having to report the $400,000 of capital gain as income.
- An Income Tax Deduction is available to those who create CRTs. People in Washington are able to receive a significant federal income tax deduction based upon a portion of the market value of the asset they place in a CRT.
- Tax-Free Compounding occurs on the asset(s) that is placed in a CRT. For example, if you place an appreciated piece of real estate in a CRT and then sell it, the proceeds are typically then invested in stocks and bonds. Any investment growth inside the CRT will occur tax-free for as long as the trust is in existence.
- Income Payments Taxed Favorably occurs as people receive their payments from a CRT. Often, if invested carefully, the person(s) receiving income from a CRT may receive portions of that income taxed at long-term capital gain rates. For many people, the long-term capital gain of 15% is less than their ordinary income tax bracket.
- Estate Tax Elimination can be accomplished for those with large estates. Effectively, the value of the asset placed in a CRT comes out of the donor’s estate, thereby lowering the donor’s taxable estate. As an example, if a couple has an estate valued at $7,000,000, and they place a $500,000 asset in a CRT, the taxable value of their estate would be lowered to $6,500,000.
Finally, life insurance can sometimes be a viable part of a CRT plan. If the donor(s) want their loved ones to participate in the full value of their estate, then creating a life insurance trust with some of the CRT tax savings and additional cash flow can allow loved ones to “remain whole” as it relates to their inheritance.
Other giving options
If you have publicly traded stock that has appreciated in value, it is most advantageous to give the stock rather than cash. Why? Because any capital gain tax that you would have incurred if you sold the stock will be avoided when you give it to the University instead. If you happen to like that particular stock, you can then use your available cash to repurchase the stock at a new, higher cost basis.
While cash, CDs, and marketable securities are thought of most often when making a gift to a charitable organization, real estate is sometimes the best gift of all. Many people reach a stage in life where they simply don’t want the management responsibility that accompanies property ownership.
For those who have rental apartments or commercial buildings, not only can they avoid capital gain tax, but they can avoid depreciation recapture tax as well. For those people with farms or vacation homes, life-income arrangements such as CRTs or Gift Annuities can be equally rewarding.
Call the University and a representative will be happy to discuss a gift of real estate with you.
The University is able to receive life insurance gifts in two ways. First, people often have what is called a “paid up” policy. In other words, they have owned the life insurance for so long, that cash value has grown inside the contract. Sometimes the cash is significant enough that the earnings on that cash are enough to pay the premiums.
In those instances, the life insurance is deemed to be “paid up.” So, whether a person someone 1) has a “paid up” policy or 2) has a policy with significant cash surrender value, the University is pleased to receive these kinds of life insurance gifts.
NOTE: The University does not participate in startup life insurance programs, in any form, where the goal is to have donors make donations with the expectation that the University will use those proceeds to pay insurance premiums.
Recently Congress changed the rules on retirement plans. Today, the payout
rate requirement after age 70.5 is much lower than they used to be. Consequently, as people get into their 80s and 90s its more likely that their IRA, KEOGH, or 401k balances will remain higher. That is good news for most older Americans!
However, there is a looming…and often large…tax on retirement plans that people often don’t consider while doing their estate planning. Here’s how it works:
Congress allows each of us to put money into a retirement account during our working years tax-free. In other words, we don’t have to pay income tax on the amount of money we place in IRAs, KEOGHs, or 401ks. Additionally, our retirement accounts get to compound in value tax-free as well in order that they can grow as quickly as possible to support us during our retirement years.
However, the IRS doesn’t forget that those very same retirement plans have never been subject to tax! So, if a person passes away while holding the retirement plan in their estate, income tax to your heirs AND possibly estate taxes will be due.
To avoid this scenario, it’s often advisable for people simply to name their favorite charitable organization(s) as the remainder beneficiary of their retirement plan. This can be easily done by calling the retirement plan administrator and filling out a new beneficiary designation form. Charitable organizations are not subject to estate or income tax, so the full value of the retirement plan can become a gift.
Often referred to as “bequests” a person or couple can name the University as a beneficiary in their estate documents, regardless whether they use a will or living trust. This is one of the most meaningful ways a charitable organization can be supported by those who have been touched in some way by the work the University is doing. And, it’s easy to do! You can call our offices at 503.517.1220 and our staff will be happy to provide language you can give your attorney as you update, or complete, your estate plan.