CLASnotes

Gift Planning Made Easier


The College of Liberal Arts and Sciences is the heart and spirit of academic life at the University of Florida. Here, students learn how to communicate effectively, to reason independently and to understand the traditions that have shaped the world. The college is home to many exciting programs as well as faculty who are nationally recognized leaders in education.

Private support of CLAS continues to be paramount in maintaining and enhancing our role within the state of Florida and beyond. Often our alumni underestimate the significance of estate gifts. If you plan to include the college in your estate plan, you may now, more than ever before, wish to consider a gift using retirement assets. This includes donating your 401(k) plan, 403(b), IRA or other qualified retirement plan.

Under recently passed qualified plan rules, the College of Liberal Arts and Sciences can now be named as a successor beneficiary to all or part of your plan's assets, without causing an increase in the minimum amount you are required to withdraw each year. You must contact your plan directly to make any changes to your agreement. Tax lawyers, accountants and financial planners are praising these new rules as favorable to both donors and charities.

Using qualified plan assets to make a contribution to charity has always been a smart move for another reason. Assume you have a choice between giving non-spouse beneficiaries, such as children or grandchildren, the assets from a qualified plan or from other appreciated estate assets. You will almost certainly want to give the other appreciated assets to your heirs, because they receive a stepped-up basis on these appreciated assets equal to their fair market value at date of death. As a result of the higher basis, the heirs can sell the estate assets without recognizing any gain (unless the assets have further appreciated after your death). Conversely, if you bequeath the qualified retirement assets to your children or grandchildren, not only might your estate have to pay estate tax on these assets, but your heirs would also have to pay income tax on the assets distributed through the qualified retirement plan.

One word of caution, however. A participant's beneficiary designations are effective as of the date of death. This means the College of Liberal Arts and Sciences cannot be named as a beneficiary after the participant's death.

Call Cynthia Butler at (352) 846-3447 or send an e-mail message to cbutler@uff.ufl.edu for more information. Please consult with your attorney and accountant regarding your individual planning.

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