Giving Wisely

Charitable gifts help to meet program priorities now and in the future. University Hospitals is a responsible steward of the gifts entrusted to us. Your gift can take multiple forms and can help you address your personal financial goals. Do you want to make a significant gift during your lifetime, or would a gift as part of your estate work better? Do you have a particular asset that you are thinking of donating? Do you want to increase your retirement income, or is your primary goal estate preservation? Are you carrying excess life insurance or a large balance in your retirement plan?

We are happy to work with you and your advisors to help you create the gift plan that works best for your philanthropic and financial goals.

• Travel through the Legacy Planner to help you decide what plan may best meet your needs.
• Click here to see what options may meet your particular situation.
• Use the following guide to help you weigh your options.

1. Give now, or give later?

   A significant lifetime gift will allow UH to meet its immediate objectives. In turn, it will give you maximum tax benefits, especially attractive if you are in high earnings years. It can also be the simplest gift to arrange.

   You may, however, prefer to leave your assets and cash flow undisturbed until your death, and instead make your gift through your estate. Estate gifts are critically important for UH's long-term financial strength and will ensure its ability to meet the opportunities and challenges of the future. Estate gifts are typically provided through a will or living trust, a retirement plan, or a life insurance policy.

2. What assets to give?

   Cash.  A gift of cash is the simplest, most direct way to support UH. Due to tax savings from the charitable deduction, your net cost can be much less than the actual amount of the gift.

   Appreciated securities. Get the same tax deduction as if you had given cash, but use stocks or bonds that cost you less than they are currently worth. Your deduction is based on market value, but you incur no capital gains liability on the transfer to us. It's one of the best tax incentives left, and we can work with your broker to make a gift of securities simple.

   Real estate. Gifts of land, vacation homes or income-producing properties can provide wonderful benefits to UH. You can give real estate outright, transfer it in a part sale/part gift arrangement, use it to fund a life-income gifts, or give your residence and reserve the right to continue to live there. We must review each gift proposal carefully, and sometimes it's not practical for us to accept the gift.

   A retirement account. The balance remaining in your retirement account after your death is potentially subject to double taxation if it passes to your heirs: it's taxed both as income and as an estate asset. In some cases, over 75% of the account value may be owned in taxes. If you designate the remainder of your account to UH, and then use other assets for gifts to your family, you will avoid both taxes on your plan assets

   Tangible personal property. You may be holding tangible personal property like books, artwork or equipment that you no longer wish to own. These assets could bring real benefit to UH if we're able to put the assets to good use.

   Business interests. Interests in partnerships, closely-held companies, S Corporations, and similar business enterprises may hold value that can benefit UH. We'll review the proposed gift, and if we agree, will work with you and your advisors to make the transfer simple.

3. How can a gift pay me back?

   Some gifts allow you to benefit UH later but receive a steady payment stream now. You can receive fixed or variable income, take payments for your lifetime or for a term of years, and even direct income to other beneficiaries. In essence, you make a contribution yet retain benefits from what you gave away. Such gifts include charitable remainder trusts and charitable gift annuities.

   Your charitable deduction is based on the full market value of the assets you gave, minus the present value of the income interest you retained. The higher the income payout, the lower the deduction.

   These flexible gifts can address a variety of your financial family and philanthropic planning objectives, and they help solidify UH's long-term financial strength.

4. What are my choices in life income gifts?

   Charitable gift annuity is the simplest; in return for your gift, you and/or another beneficiary receive a fixed annuity for life. The annuity rates and the charitable deduction tend to be higher with a gift annuity than with other life-income gift. There is also an attractive reduction in the taxation of annuity payments. This gift plan is most appropriate if long-term fixed income is an attractive strategy for you.

   Deferred gift annuity postpones for at least a year the annuity payments to the beneficiaries. In return for this delay, beneficiaries receive larger annuity payments, and the donor receives a larger charitable deduction. If you are currently in high-earning years, looking for tax deductions and new sources of retirement income, a deferred annuity with income set to start when you turn 65 may fit your needs.

   Charitable remainder annuity trust is another option if you are seeking fixed income. Annuity trusts provide more planning flexibility than charitable gift annuities. An annuity trust can pay income to multiple beneficiaries, while the gift annuity is limited to two individuals. It can pay income for a term of years (up to 20) while a gift annuity must pay for a life expectancy. Under certain circumstances an annuity trust can pay some or all tax-free income. However, gift annuities are contracts between you and UH, with payments made as an obligation of UH. The annuity trust - an individually managed trust - provides you a bit more flexibility, but your payments will be backed only by the assets in the trust.

   Charitable remainder unitrust is the most flexible life-income gift, you can add to the principal, and it pays you variable income. The amount received by beneficiaries is based on a fixed percentage of the value of the principal, which is revalued annually. This means that the unitrust's income rate can be applied against an increasing principal over time. The unitrust can pay multiple beneficiaries and can pay income for lifetime or a term of years. Like the annuity trust, the unitrust is individually managed.

5. My goal is to keep my estate intact, not increase my income ...

   Consider a charitable lead trust. It works essentially in reverse from the life-income gifts discussed in Questions 3 and 4, above: your gift is placed in a trust that pays income to us for a term, then returns the principal to beneficiaries you designate.

   The lead trust can be an effective tool to remove a portion of your assets and estate from tax liability and pass appreciation to your heirs free of transfer tax.