Southwest Baptist University

Planned Giving - An Investment in the Future

The Advantage of Giving Appreciated Assets

Millions of Americans with long-term investments in stocks, bonds, mutual funds, or real estate are discovering that their holdings will generate significant capital gains if sold. If all or part of these investments are sold, the resulting tax liabilities could be substantial. Using appreciated assets to fund a gift to Southwest Baptist University can eliminate capital gains tax obligations and ensure our continued ability to provide students with a quality college education that will empower them to reach their full academic and spiritual potential.

The financial advantages alone make appreciated asset giving worthwhile, but the personal satisfaction you receive from helping provide the means for more students to acquire a Christian education is the greatest benefit of all.

Gift Annuities - A Gift That Lives With You

More and more people are discovering the surprising benefits of making charitable gifts in the form of gift annuities.

A gift annuity offers you a way to further causes you believe in, while benefiting from one or more of the following:

The gift annuity meets the needs of many who wish to give but want to make certain they have first provided for their financial needs and those of their loved ones.

Read on for answers to frequently asked questions about gift annuities. You may find that a gift annuity can help you make a gift you never dreamed possible.

Answers to Frequently Asked Questions

Q: What is a gift annuity?
A: A gift annuity is an agreement between an individual and a qualified charitable organization or institution. The donor transfers assets to the organization and receives fixed payments for the rest of his or her lifetime and/or the lifetime of another person, if desired.

Q: Are there tax benefits?
A: Yes. Since a portion of your gift will be used for charitable purposes, you are entitled to a federal (and perhaps state) income tax deduction in the year you make your gift . Part of each payment is tax free for a period of years as well.

Q: What determines the size of each payment?
A: A number of factors, including the amount you place in the gift annuity and your age at the time the annuity is created.

Q: Why does my age affect the rate of payment I receive?
A: Part of the amount you transfer is returned to you over your life expectancy, and life expectancy changes with age. Generally, the older you are when your gift annuity begins, the higher your rate of payment.

Q: Does that mean my payments change from year to year?
A: Not your rate of payment on a particular gift annuity agreement. The rate is set and fixed when your annuity begins. But if you give for additional gift annuities-as many people do- the rate will generally be higher for each agreement made in subsequent years.

Q: What if I outlive my life expectancy?
A: One of the attractive features of gift annuities is that they are designed with this possibility in mind. The gift annuity agreement requires that payments are to be made for as long as an annuitant (a recipient of payments) lives.

Q: Are the payments affected by interest rate or economic fluctuations?
A: No. Payments are never lowered or raised regardless of changes in interest rates or the national economy. All net assets of the charitable recipient stand behind your agreement.

Q: Exactly how can I benefit another person through a gift annuity?
A: You can designate a loved one to receive the payments either with you, instead of you, or only following your death. This can result in a double gift- one to the charitable entity and another to a relative or a special friend.

Q: Is the payment the same if more than one person receives payment?
A: Annuity payments may be made for the lives of one or two persons. Since the combined period of their life expectancy is typically longer than one person's life expectancy, the rate payment will be somewhat lower. Payment rates for two-life annuities are available upon request.

Q: Can I give up securities rather than cash to set up a gift annuity?
A: Yes. Often the tax benefits are even greater if the securities have increased in value because you may avoid the tax on a portion of the capital gain in the property. If you give a low-yielding asset, you may be able to increase your income, since a gift annuity may pay more and be taxed more favorably than other income.

Q: Will my gift annuities be part of my estate?
A: No. If payments are made to you only, the gift portion goes directly to the charitable recipient, thus avoiding estate taxes and probate costs. Some gift or estate tax may be due if payments are made to someone other than a spouse.

Q: Do I have to wait until I retire for the payments from a gift annuity to begin?
A: No. Payments may begin at anytime.

Q: How can I begin a gift annuity?
A: A gift annuity can be created with a minimum of effort. The first step is to contact us for exact current benefits and a gift annuity illustration. Please contact Steve Whisler, Director of Estate Planning, (417) 328-1528 or Cindy Rice, Estate Planning Associate, (417) 328-1838.