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Other Planned Gifts

In addition to bequests and life income plans, many other types of planned gifts exist that offer particular advantages for specific circumstances. Here is a sampling of the most popular.

Charitable Lead Trusts

A charitable lead trust is like a charitable remainder trust in reverse. You select the assets used to fund the trust and decide how long it will last, and the IU Foundation receives income from the trust to support the IU School of Medicine. There is no minimum payout. When the trust terminates, its assets return to you or your designated beneficiary.

This type of trust can be useful if you want to reduce your current income but wish to retain the assets for your family. A charitable lead trust can be a means to transfer substantial amounts of wealth from generation to generation, largely free of estate, inheritance and gift taxes.

A charitable lead trust is a complex giving vehicle with many income, estate and gift tax consequences. You should discuss your goals with your legal and financial advisers to determine whether a charitable lead trust would suit your plans. We also encourage you to contact the planned giving professionals at the School of Medicine for more detailed information.

Gifts of Real Property Subject to Life Estate

Your personal residence or farm may be the single most valuable asset you own. If it has appreciated significantly in value, you could owe tremendous capital gains taxes if you or your heirs sold the property. An alternative is to give the property to the IU Foundation subject to life estate, which simply means that you or your designees retain use of the property for life.

You gain an immediate tax deduction for the remainder interest in the property, and you escape the potential capital gains taxes. Best of all, you get to make a substantial gift to support the Indiana University School of Medicine without disrupting your lifestyle.

Gifts of this kind require detailed language tailored to your specific situation and needs, and the advantages and benefits vary accordingly. The School of Medicine’s planned giving staff will be happy to work with you and your advisers to help arrange the best plan for you.

Wealth Replacement with Life Insurance

When you make a gift to the Indiana University Foundation for the benefit of the Indiana University School of Medicine, you may use a life insurance trust to replace the value of the donated assets. In this way, you can protect the interests of your heirs while still fulfilling your philanthropic goals.

In this arrangement, you create a trust to buy insurance on your life, with your children as beneficiaries. You can use the tax savings from your charitable gift or the payout from a life income arrangement to cover the premiums. After your death, the proceeds from the policy pass to the trust free of estate taxes, thereby replacing the value of the original charitable gift.

Wealth replacement life insurance trusts can be set up in several different ways, and all have strict technical requirements. You should discuss them with your financial and legal advisers before deciding to pursue this option. The School of Medicine’s planned giving staff will be happy to answer your questions.

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