A Bequest to Diversify Research
Dr. Howard Kaufman, ’82 B.A., has built a remarkable career, including developing life-saving cancer drugs and holding an endowed professorship. Hoping to help others achieve success, Kaufman is providing a gift in his trust to endow a faculty chair or professorship and support research. His generosity supports students and faculty like him in the College of Liberal Arts and Sciences at the University of Illinois Chicago (UIC).
“UIC brings in people who wouldn’t have had entrée to these topics. New people mean new ideas. Everyone is born with the potential for real talent, but not everyone has the means to develop it,” Kaufman says of the motivation behind his gift.
Raised in Chicago’s north suburbs, Kaufman chose to attend UIC because it was affordable and offered him a scholarship. He graduated with a bachelor’s degree in psychology and a minor in chemistry, setting him on a path to advanced degrees and a research career. Kaufman developed two FDA-approved drugs, one of which, avelumab, was the first approved treatment for patients with a rare, often fatal, skin cancer.
Today, Kaufman is a lecturer at Harvard Medical School, a surgeon at Massachusetts General Hospital, and CEO of Ankyra Therapeutics, where he continues to develop new drug therapies to cure cancer.
“When I thought about how I got into this career, it really goes back to UIC,” says Kaufman. “I had a successful career, and I wanted to give back.”
He chose to give to UIC because it has one of the most diverse student bodies in the nation. Diversity creates new ideas and new ways of looking at a problem and that, Kaufman says, is how you change the world.
INSIDE
• 3 Smart Ways to Give in the Current Economic Climate
• A Bequest Is the Most Popular Way to Create a Legacy at UIC
• Student Spotlight
• Ways the Omnibus Bill Could Affect Your Charitable Giving
GIFT PLANNING IDEAS FROM THE UNIVERSITY OF ILLINOIS FOUNDATION SPRING 2023 | ISSUE 100
3 SMART WAYS TO GIVE IN THE CURRENT ECONOMIC CLIMATE
The appropriate way to make a gift depends on the current economic climate, your financial situation, and your stage of life. Here are some examples, based on various circumstances.
1 Gift of Appreciated Stocks
Situation: The total value of your portfolio of securities has decreased this past year, but that portfolio includes some stocks that have appreciated in value since you purchased them a number of years ago and some that are worth less than you paid for them. Because you have recently sold some of your stocks, you are holding a significant amount of money in cash equivalents. What might you do if you want to help the University of Illinois Chicago (UIC) meet a current need and maximize your tax savings?
Suggestion: Consider contributing outright some of your most highly appreciated stocks held for at least one year. Then use some of your cash to repurchase those stocks or to buy other stocks of comparable quality. You will not be taxed on the capital gain, and you will receive a charitable deduction for the current value of the contributed stocks. The purchase price of the replacement securities is your new cost basis; so if you sell those stocks in the future, you will be taxed only on gain accruing from this point.
2 Percentage Bequest
Situation: You have long planned a larger, impactful gift, but because of uncertainty about the economy and your personal circumstances, you are not comfortable transferring any substantial amount at the present time.
Suggestion: Consider updating your estate documents to include a charitable bequest for a percentage of whatever remains after paying expenses and specific bequests. If your estate turns out to be smaller than you expected, the charitable gift will be correspondingly smaller, having less impact on your heirs. This is a revocable future gift, so you can modify it at any time. An alternative, which may be better from a tax standpoint, is to name the University of Illinois Foundation (UIF) for the benefit of UIC as beneficiary of remaining retirement funds and give other assets to heirs.
3 Gifts That Pay You Income
Situation: You want to ensure enough income to maintain a good quality of life during your retirement years, so you are unwilling to lose the income from any of your investments. You might consider a gift, but only if it would not diminish that income.
Suggestion: There are gift arrangements whereby you can contribute an asset and receive income. Often, the income from that gift instrument will be larger than the interest and dividends you are currently receiving. We would be pleased to prepare for you a financial illustration describing the payments you would receive, the amount of your deduction, and how you would avoid tax on the capital gain if you transfer appreciated assets, such as securities or real estate.
2
Plan Your Gift to Meet Life Circumstances
Establish a Charitable Remainder Trust to Save Taxes and Increase Income
Susan wants to support UIC but is concerned about the economy. She is hesitant to make a large outright gift. She decides to establish a charitable remainder trust. She receives a substantial deduction that reduces her taxes, avoids tax on the capital gain upon transfer, and increases her income.
Donate Your IRA Required Minimum Distribution
Raymond has reached the age where he must take a required minimum distribution (RMD) from his IRA. He doesn’t need the income and would like to avoid paying the tax on his distribution each year. He wants to support student scholarships at UIC and has learned he can direct his IRA custodian to distribute up to $100,000 as a qualified charitable distribution (QCD) to the University of Illinois Foundation. His distribution can satisfy, in whole or in part, his RMD for the year and will not be included in his income.
Combine Present Outright Gifts and a Future Legacy Gift
Sarah has been making gifts to support UIC for 20 successive years. She gives $4,000 per year to support a program she highly values. To ensure that impact continues, she includes a bequest in her will for $100,000 to establish a named endowed fund which allows a percentage of the earnings to be used each year in perpetuity for the program she benefits with her annual gift. As the endowment grows, her distribution to the program will increase. Sarah likes that she can provide help now and into the future with her legacy gift.
The information contained herein is offered for general informational and educational purposes. The figures cited are accurate at the time of writing. State law may affect the results illustrated. This is not legal advice. Any prospective donor should seek the advice of a qualified estate and/or tax attorney or professional to determine the consequences of their gift. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association.
3
A BEQUEST IS THE MOST POPULAR WAY TO CREATE A LEGACY AT UIC
A specific bequest identifies particular assets, while a general bequest provides a certain amount. A percentage bequest expresses the gift as a percent of your total estate, regardless of size. Contact us for bequest language to the University of Illinois Foundation, Tax ID#: 37-6006007, to benefit UIC.
To learn more about creating your legacy and to ensure your specific language can be honored as you intend, visit uic.giftplans.org.
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STUDENT SPOTLIGHT
April 29, 2011
of 2026
B.S. Architecture B.S. Real Estate
Recipient of the UIC Kokkino Educational Scholarship
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“It is a huge honor to be the first recipient of the Kokkino Scholarship. This scholarship has further driven me to recognize and work towards my academic goals, and it will always remain a reminder to succeed and thrive in the architectural world. With this scholarship, I intend to pursue architecture to the fullest and excel with flying colors.”
—Racheal Inioluwa Olujide, Class
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New Higher CGA Rates!
Want to receive tax benefits and fixed payments for life?
Establish a charitable gift annuity with the University of Illinois Foundation to benefit UIC. Read more at uic.giftplans.org/CGAs
Please send me a complimentary copy of your new guide(s):
n Important Changes Affecting Charitable Giving Strategies in 2023
n Your Questions Answered: Charitable Tax Planning with Retirement Funds
n I have already included, or am considering including, the University of Illinois Chicago in my estate plan and would like to discuss my options.
You can also download these materials at uic.giftplans.org/guides
Your interest and consideration are appreciated.
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Ways the Omnibus Bill Could Affect Your Charitable Giving
The Consolidated Appropriations Act of 2023, known as the omnibus bill, included changes that could affect your charitable gift planning. Individuals who have an IRA and are aged 70½ or older have been able to make tax-free transfers of funds from their IRA to one or more charities and have the amount transferred count towards their required minimum distribution. The maximum amount that could be transferred in any one year was set at $100,000. The omnibus bill will adjust the cap for inflation beginning in 2024. The amount transferred, provided it meets certain requirements, is known as a qualified charitable distribution (QCD). Previously, only IRA transfers for outright gifts qualified as QCDs. The new omnibus bill allows a transfer of IRA funds for a life-income plan that pays income to the IRA owner and/or the owner’s spouse. The transfer can be made in only one tax year, and the contribution limit is $50,000 and will be adjusted for inflation. Provided it meets these requirements, the IRA transfer will be treated as a QCD. To learn more about other changes, visit uic.giftplans.org or call UIF at (217) 244-0473.
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