Educating Generations at the University of Illinois Champaign-Urbana - Spring 2023 | Issue 100

at the University of Illinois Urbana-Champaign

Life Connections Inspire Bequest at UIUC

Richard, ’73 B.A., and Conna Oram, ’72 B.A., did not have to debate long about their legacy at the University of Illinois Urbana-Champaign (UIUC). Their life story runs deep at Illinois.

Both sets of parents were Illinois graduates. Conna’s mother worked in circulation in the main library for Richard’s father, an academic librarian. “We both had access to the stacks as children, and I can remember reading LIFE magazines and more for hours,” Richard shares. The children, however, would not meet until graduate school.

Conna attended Urbana High School, while Richard remembers the rigor of University Laboratory High School: “I am grateful for my science background at UNI, though I did not enjoy the math courses,” he chuckles. “I got rewarded a lot in English.” Both of his parents were English majors, and his mother insisted on proper grammar.

English and European history interested Conna. “I had some very good teachers and got inspired to study medieval studies even more,” she said. Conna would often visit the Spurlock Museum with her mother.

Richard completed a Ph.D. at Cornell University, where he met Conna. “The pull of our hometown drew us together, and the rest is history,” Conna says. Richard later earned a master’s in Library and Information Science at the University of Texas in Austin and pursued a library career at UT’s Harry Ransom Center in Texas where he was head of library services. Conna taught high school Latin.

Now retired and active volunteers, the couple is grateful their estate gift honors their families’ values and history while making an impact on future generations. Their gift will support the department of English, the Spurlock Museum, UNI High School, and the library, including naming the Oram and Judy Families Reading Room in the Rare Book and Manuscript Library.

INSIDE

• 3 Smart Ways to Give in the Current Economic Climate

• A Bequest Is the Most Popular Way to Create a Legacy at UIUC

• Student Spotlight

• Ways the Omnibus Bill Could Affect Your Charitable Giving

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 Urbana-Champaign (UIUC) 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 UIUC 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.

Plan Your Gift to Meet Life Circumstances

Establish a Charitable Remainder Trust to Save Taxes and Increase Income

Susan wants to support UIUC 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 UIUC 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 UIUC 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.

A BEQUEST IS THE MOST POPULAR WAY TO CREATE A LEGACY AT UIUC

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 UIUC.

To learn more about creating your legacy and to ensure your specific language can be honored as you intend, visit uiuc.giftplans.org.

IMPORTANT: DO NOT ENLARGE, REDUCE OR MOVE the FIM and POSTNET barcodes. The Special care must be taken to ensure FIM and POSTNET barcode are actual size AND placed to meet both USPS regulations and automation compatibility standards.

UNIVERSITY OF ILLINOIS FOUNDATION

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GIFT PLANNING AND TRUST SERVICES

UNIVERSITY OF ILLINOIS FOUNDATION

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“I’m majoring in speech and hearing science at the University of Illinois at UrbanaChampaign with a future goal of becoming a speech language pathologist. I want to help in treating language, speech, and communication disorders! I have made many friends from different backgrounds and have had such fulfilling experiences thus far during my time here. I am so thankful to the donors who made this all possible. Having such kind donors contributing to the expenses of my education makes me forever grateful.”

—Jennifer Yoon, Class of 2024 Speech and Hearing Science, College of Applied Health Sciences

Recipient of David Hester Bloom and Mary Ellen Bloom Scholarship

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 UIUC. Read more at uiuc.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 Urbana-Champaign in my estate plan and would like to discuss my options.

You can also download these materials at uiuc.giftplans.org/guides

Your interest and consideration are appreciated.

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 uiuc.giftplans.org or call UIF at (217) 244-0473.