Not only do you have options for how your gift will be used, you also have options on what to give and how to give. There are gifts that cost you nothing now, gifts that pay you income, and gifts that allow you to decide what happens when.
With a CLT, you irrevocably transfer assets to a trustee and provide that payments will be made to Merrimack for a certain number of years during your life (or someone else's). When that term ends, the principal is passed to your children or other heirs at greatly reduced gift and estate tax costs (and, in some cases, these taxes may be avoided completely).
When you transfer assets to a CLT, you are making a taxable gift to the individuals who will receive your trust's principal when it ends. Depending on the type of CLT you select, you may be eligible to take an immediate partial tax deduction with cash contributions. The calculation of the income tax deduction takes into consideration the term of the trust, the projected lead payments, and IRS interest rate that is used to assume a certain rate of growth of trust assets. Additionally, the assets in your CLT are removed from your taxable estate. This means that any growth in the value of your trust's assets during its term can be passed on to your heirs completely free of taxes.
A CLT is a taxable trust that will pay income tax to the extent its income earned exceeds the charitable distribution made to Merrimack each year. A careful trustee can balance your CLT's income against its charitable payments to minimize income taxes.
Include a gift to Merrimack College in your will. You can make your legacy unrestricted or direct it to a specific purpose. You may even indicate a specific amount or percentage of the balance remaining in your estate.
If you express your gift as a percentage (e.g., 20 percent of the residue of my estate), you can maintain the same relative gifts to charities and your heirs, regardless of changes in estate value. If youre considering designating your gift for a specific purpose, such as a scholarship fund or support for a specific department, contact us to ensure that we understand your wishes.
You may wish to share the following sample language with your attorney:
I give (a specific dollar amount/a specific asset, or percentage of the rest, residue, and remainder of my estate) to the Trustees of Merrimack College, an educational corporation established by law at North Andover, MA, for its general tax-exempt purposes.
NOTE: If you wish to restrict your estate gift to a specific purpose or program at Merrimack College, please contact Leila C. Rice in advance to assure that the language you include will accomplish your wishes and align with Merrimack Colleges needs.
Designate Merrimack College as a beneficiary of part or all of your qualified retirement plan or your IRA. Normally the assets held in an IRA or qualified retirement plan will be subject to both income and estate taxes, but if you name Merrimack College as a beneficiary of a percentage (or all) of your retirement plan, that portion will pass to Merrimack College free of income or estate taxes.
Designate your bank account to be payable on death (POD) to Merrimack College. There is no change in ownership, control, or benefit from this account while you're living. The POD designation causes whatever funds that remain in the account to go to Merrimack College.
Designate your brokerage or investment account to be transferable on death (TOD) to Merrimack College. It's not necessary for the TOD designation to transfer all of the account solely to Merrimack College. You can designate percentages of the account to pass to additional beneficiaries. To set up the TOD endorsement, contact your investment advisor and provide the instructions regarding the change.
A charitable gift annuity allows you to gain the security of fixed payments for life, receive a tax deduction for a portion of your gift, and make a contribution to Merrimack College that you may not have thought possible.
Upon termination, the remaining annuity assets are used by Merrimack for the purpose you designate or Merrimacks general purposes.Download a Guide to Establishing a CGA Close
If you dont need income right away, you can obtain both a higher payout rate and a larger charitable deduction by establishing a deferred charitable gift annuity. A deferred gift annuity provides you with fixed payments for life that begin when you need them and an immediate tax deduction for a portion of your gift.
Upon termination, the remaining annuity assets are used by Merrimack College for the purpose you designate or Merrimacks general purposes.
The minimum for establishing a charitable gift annuity with Merrimack College is $10,000.Close
Charitable remainder unitrusts allow you to make a gift of cash, stock, or real estate, claim an income a tax deduction for a portion of your gift, and receive variable payments from your unitrust for life or a term of years.
When the term of the trust concludes, the remaining trust assets are used by Merrimack for a purpose you designate.
The minimum for establishing a charitable remainder unitrust with Merrimack as trustee is $100,000. Future additions to the trust can be made in any amount.Download a Guide to Establishing a Charitable Remainder Unitrust Close
Giving publicly traded shares of stock, bonds, or mutual funds to Merrimack College allows you to turn an appreciated asset into support for students and faculty.
Youll receive a charitable income tax deduction for the fair market value of your gift, and Merrimack College can then sell the stock without having to pay capital gains tax. All the proceeds from the sale will be used for the charitable purposes you specify.
Do you own your own business? Its also possible to give closely held stock to Merrimack College.
If you own your own business, the stock in your company may have a low cost basis, making the sale of the stock subject to significant capital gains tax.
While potentially tax-advantaged, gifts of closely held stock require thoughtful consideration on the part of all parties including: the shareholder, the company issuing the stock and Merrimack. Please call to discuss your objectives and learn how we have assisted dozens of donors complete gifts of closely held stock and partnership interests.Close
Using real estate to make a gift allows you to turn an illiquid, highly appreciated asset into support for students and faculty, claim a charitable income tax deduction, and save capital gains taxes. Donors have contributed to Merrimack College vacation homes, undeveloped land, commercial real estate, personal residences, and condominiums.
The real cost of your gift is reduced, since youll save income and capital gains taxes by giving appreciated property to Merrimack. You can use real estate to make a variety of different types of gifts, including:
By contributing your home, while retaining the right to live in it for life or a term of years, you claim an income tax deduction for a portion of your gift, and, through a retained life estate, continue to use your property during your life time.
When your interest ends, Merrimack can use your home or the proceeds from its sale—either for Merrimacks greatest need or for a purpose you specify.
The minimum gift for establishing a retained life estate with Merrimack is $100,000.Close
You may transfer ownership of a paid-up life insurance policy to Merrimack. Merrimack may elect to cash in the policy now or hold it.
Designate Merrimack to receive all or a portion of the balance of your Donor-Advised Fund (DAF) through your fund administrator (you also can make a grant to us at any time from your donor-advised fund). The balance in your DAF passes to Merrimack when it terminates.
A grantor charitable lead trust allows you to claim an income tax deduction based on the present value of the future annual payments to Merrimack, and retain the principal when the trusts term ends.
A charitable remainder unitrust allows you to donate cash or appreciated assets and receive payments based upon a percentage of the trusts annual value. When the value of the trust increases, so do your payments and your gift to Merrimack. Your donation qualifies for an immediate tax deduction, and you save capital gains taxes.Download a Guide to Establishing a Charitable Remainder Unitrust
A flip unitrust allows you to donate illiquid assets, such as business interests or assets earning little or no income, like undeveloped real estate, and receive an immediate tax deduction. The value of those assets appreciates in the trust tax-free. When the assets are sold, saving capital gains taxes, the trust flips to a conventional charitable remainder unitrust and begins making payments to the beneficiary.
A family trust also is called a charitable lead trust because the charity takes the lead in receiving payments for a period of time with the remaining assets, plus appreciation, going to members of the next generation when the term of the trust expires. The donors pass the trust assets to heirs at reduced transfer tax cost.Download a Guide to Establishing a Charitable Lead Trust
If youre 70 ½ or older, each year you can instruct your IRA administrator to transfer all or part of your required minimum distribution (up to $100,000) directly to Merrimack and avoid paying the tax had you taken it as income.
The charitable IRA rollover allows donors to exclude certain transfers of Individual Retirement Account (IRA) assets that are made directly to public charities from their taxable income.
The charitable IRA rollover allows you to complete charitable gifts with IRA assets during your lifetime.
An individual taxpayers total charitable IRA rollover gift cannot exceed $100,000 per tax year.Download a Guide to a Charitable IRA Rollover Common Questions about the IRA Rollover