Frequently Asked Questions

  1. Gifts that Provide Income – Charitable Gift Annuities
  2. Gifts that Provide Income – Charitable Remainder Trust
  3. Gifts of Securities
  4. Giving a Life Insurance Policy
  5. Gifts from Retirement Plans
  6. Wills and Bequests
  7. Charitable Lead Trusts

 

  

FAQ: Gifts that Provide Income – Charitable Gift Annuities

  • What is a charitable gift annuity?
    • A charitable gift annuity is a simple contract between you and the Capstone Foundation at The University of Alabama.  You make a gift of cash or securities to UA, and in return UA agrees to make fixed payments to you and/or another person for the remainder of your life or lives.  Payments may be made annually, quarterly or monthly to fit your preference.
  • What assets can I use to fund my gift annuity at the University?
    • Cash (check or wire transfer)
    • Stocks or mutual funds (click here for transmittal instructions)
  • What is the minimum charitable gift required to fund the annuity?
    • $25,000 is the current minimum contribution accepted for gift annuities.
  • What is the minimum age requirement for the annuitant (beneficiary)?
    • Current annuity agreements are offered to beneficiaries 70 years or older.
    • Deferred annuity agreements are offered to beneficiaries 65 years or older.
  • Who can benefit from my gift annuity established with the Capstone Foundation at UA?
    • You may name yourself and/or someone else as beneficiary, with a maximum of two beneficiaries per agreement.
    • You may establish a gift annuity for a parent or other loved one.
    • You may direct the remainder of your gift to support the program(s) at UA that you specify.
  • Do I receive any tax benefits for establishing a gift annuity?
    • You may be eligible to receive a charitable income tax deduction in the year you establish the charitable gift annuity.  Assets may also be removed from your taxable estate.  Gift annuities funded with appreciated securities may provide additional tax savings.
  • Is there a chance that the Capstone Foundation will raise or lower my annuity payment each year?
    • The payment rate in force when you establish your gift annuity will not change regardless of fluctuations in economic conditions or interest rates.
  • Do I need to worry about outliving my payments?
    • No, the Capstone Foundation will continue making payments as long as at least one beneficiary is living.
  • What are the current gift annuity rates?
    • Rates range from 5.1% to 9.0% for single life agreements.  See chart below for current rates.
    • Contact the Planned Giving staff for a personal illustration without obligation.

Charitable Gift Annuity Rates

One Life

Age

Rate

70

5.1%

75

5.8%

80

6.8%

85

7.8%

90+

9.0%

 Two Life 

Ages

Rate

70 & 73

4.7%

75 & 78

5.2%

80 & 82

5.9%

84 & 86

6.7%

88 & 90

7.9%

For illustrative purposes only and based on current American Council on Gift Annuities rates.
Please contact our Planned Giving staff for rates and specific benefits.
We suggest that you discuss your plans with your financial advisors.

  • How do I set up a charitable gift annuity?
    • Call the Office of Planned Giving at (205) 348-0999 or toll free at (888) 876-4438. We will create a simple agreement between you and the Capstone Foundation at The University of Alabama.

By including The University of Alabama in your will or other estate plan, you qualify for membership in the Denny Society.  Click here for more information.

Contact our Planned Giving staff for more information or a sample gift annuity illustration.

 <- Return to the ‘Retaining Income’ page

  

FAQ: Gifts that Provide Income – Charitable Remainder Trust

  • Why should I consider making a gift that provides income to me?
    • Such gifts allow you to make a charitable contribution to UA now without jeopardizing your financial security.
    • By transferring assets that are not generating large returns, you can increase your level of income.
    • You can create a separate source of income for a specific purpose such as retirement or education expenses.
  • What is a charitable remainder trust?
    • A trust agreement where the donor transfers assets to the trust and receives income on a periodic basis for a specified time period such as a set number of years or the lifetime of a beneficiary.  When the trust ends, the remaining trust assets will be transferred to UA to fund the program(s) specified by the donor.
  • Who manages the trust assets?
    • A trustee appointed by the donor will manage the trust assets.  The donor, another individual, or a financial institution may be appointed in this capacity.
  • How do I set up a charitable remainder trust?
    • An attorney can draft the trust document.  We suggest your attorney also consult your financial advisors.
  • What assets can I transfer to the trust?
    • Cash
    • Securities
    • Real estate or other marketable assets
  • When I transfer the assets to the trust, does this qualify for an income tax charitable deduction?
    • You will likely enjoy an income tax deduction for a portion of the amount transferred to the trust in the year you establish the trust.
  • What about my payments?
    • You can choose to have payments that are fixed for the term of the trust or vary each year based on the value of the trust assets.

By including The University of Alabama in your will or other estate plan, you qualify for membership in the Denny Society.  Click here for more information.

Contact our Planned Giving staff for more information.

<- Return to the ‘Retaining Income’ page.

 

  FAQ: Gifts of Securities

  • What type of securities can I give?
    • Stocks
    • Bonds
    • Mutual funds
  • How do I choose a security from my portfolio to give to UA?
    • Donating appreciated securities directly to UA is one of the easiest ways for you to make a big difference.  And it is one of the most tax-efficient ways to give.  By donating the appreciated securities to UA, you may avoid capital gains taxes and be entitled to a charitable tax deduction for the full market value of the securities.
  • What if I have securities worth less than I paid for them?
    • If you have securities that have dropped in value, your best plan of action might be to sell them and donate the cash.  That way you may claim the capital loss and also deduct the charitable donation.
  • What is the process for making a gift of securities?
    • Click here for information on making an electronic stock transfer to UA.
    • If you have the stock certificates in hand, we request that you send a signed stock power and the unendorsed stock certificate to UA in separate envelopes.

By including The University of Alabama in your will or other estate plan, you qualify for membership in the Denny Society.  Click here for more information.

Contact our Planned Giving staff for more information.

<- Return to the ‘Ways of Giving’ page.

 

FAQ: Giving a Life Insurance Policy

  • Can I give an insurance policy to UA that I no longer need?
    • If you have reached a stage in life where you no longer need your life insurance policy, you may choose to make a gift of the policy to UA.  The proceeds will ultimately benefit the programs at UA that you choose such as funding scholarships.
  • Can I name UA as a beneficiary of my life insurance policy?
    • You have the option of naming UA as the sole beneficiary, a co-beneficiary, or a contingent beneficiary.  Changing policy beneficiaries is usually quite simple and can be handled through your insurance company.
  • Can I purchase a new policy and name UA as owner and beneficiary?
    • You can make an immediate gift of a policy by naming UA as the irrevocable beneficiary and assigning all rights of ownership to UA.
  • What information do I need to name UA as beneficiary of my life insurance policy?

The Board of Trustees of The University of Alabama
Tax ID number: 63-6001138
Attention:  Gift Planning Office
Box 870123
Tuscaloosa, AL 35487
(205) 348-0999
(888) 875-4438 toll-free

  • Can I determine how a gift from my life insurance proceeds will be used at UA?
    • Yes, you may support the program(s) at UA that you specify.  We can help draft a Memorandum of Agreement that outlines how UA will direct your gift.

By including The University of Alabama in your will or other estate plan, you qualify for membership in the Denny Society.  Click here for more information.

Contact our Planned Giving staff for more information.

<- Return to the ‘Beneficiary Designation’ page.

  

FAQ: Gifts from Retirement Plans

  • Why would I want to make a gift to UA from my retirement plan?
    • If you have funded a retirement plan with pre-tax dollars and find that you have more in the account than you need, making a charitable gift to UA from these funds makes sense.
    • If you have a retirement plan that requires mandatory withdrawals (such as a traditional IRA) and you do not need the income, making a charitable gift of the required distribution amount may provide income tax savings.
  • Are there restrictions on making charitable gifts from my retirement plan?
    • Usually, a donor must be at least age 59 ½ to request withdrawals from a retirement plan.  
  • Can I name UA as beneficiary of my retirement plan instead of making gifts from the plan now?
    • You have the option of naming UA as the sole beneficiary, a co-beneficiary, or a contingent beneficiary.  Changing the beneficiary of a retirement plan is simple and can be handled through the plan administrator.
  • What information do I need to name UA as beneficiary of my retirement plan?

The Board of Trustees of The University of Alabama
Tax ID number: 63-6001138
Attention:  Gift Planning Office
Box 870123
Tuscaloosa, AL 35487
(205) 348-0999
(888) 875-4438 toll-free

  • Can I determine how a gift from my retirement plan will be used at UA?
    • Yes, you may support the program(s) at UA that you specify.  We can help draft a Memorandum of Agreement that outlines how UA will direct your gift.

By including The University of Alabama in your will or other estate plan, you qualify for membership in the Denny Society.  Click here for more information.

Contact our Planned Giving staff for more information.

<- Return to the ‘Beneficiary Designation’ page

  FAQ: Wills and Bequests

  • Does everyone need a will?
    • Most people who own property of any type or value should have a will in place.  Through a will, you have the power to determine who receives your property when you no longer need it.  Without a will, state laws will usually dictate how your property will pass to your heirs.
    • If you are married, your will allows you to transfer property you own but not property your spouse owns.  Therefore, both spouses will need to have separate wills even if most of their property is held jointly.
  • Is it expensive to create a will?
    • The cost to create a will varies depending on the length of the document and the time it takes to prepare it.  However, the expense to create a will may be much less than future taxes, administrative and legal fees if you do not have a will.
  • How do I include a gift to UA in my will?
    • You have several options when naming UA as a beneficiary of your will.  The bequest can be a specific amount, specific property, a percentage of your estate, or a remainder share of your estate.  We encourage you to provide for loved ones and those who depend on you for financial support first and make UA the last in line.
  • What information should be included in my will if I name UA as a beneficiary?

The Board of Trustees of The University of Alabama
Tax ID number: 63-6001138
Attention:  Gift Planning Office
Box 870123
Tuscaloosa, AL 35487
(205) 348-0999
(888) 875-4438 toll-free

  • Can I determine how a gift from my will or estate plan will be used at UA?
    • Yes, you may support the program(s) at UA that you specify.  We can help draft a Memorandum of Agreement that outlines how UA will direct your gift.

By including The University of Alabama in your will or other estate plan, you qualify for membership in the Denny Society.  Click here for more information.

Contact our Planned Giving staff for more information.

<- Return to the ‘Will or Living Trust’ page.

  

FAQ: Charitable Lead Trusts

  • What is a charitable lead trust?
    • A charitable lead trust allows you to make charitable donations to The University of Alabama using funds that will one day be returned to you or your heirs. A charitable lead trust provides a steady stream of income to the University over a predetermined number of years based on your wishes. When the term of the trust ends, the assets used to fund the trust revert to you or your heirs.
  • How do I know if a charitable lead trust is right for me?
    • Your attorney can help you decide if a charitable lead trust is best for your situation and what assets you might place in it. The University of Alabama does not set a minimum amount required for the trust. When you set up a charitable lead trust you may serve as trustee or choose someone to manage the trust for you.
  • What are the advantages of a charitable lead trust?
    • With a charitable lead trust your donation goes to work right away helping UA students achieve their goals at the University. You may be able to eliminate or reduce the gift or estate taxes on the remainder of the fund when the term of the trust ends.
  •  How do my heirs benefit from a charitable lead trust?
    • Charitable lead trusts have been used to transfer wealth from generation to generation. By setting up a charitable lead trust, you are helping UA students today and for years to come, while still protecting your assets for your family. When the term of the trust ends, the assets in the fund will go to the heirs you have designated at significantly reduced tax rates or with even no gift or estate taxes due.
  •  What are the best assets to use in setting up a charitable lead trust?
    • You can always use cash to set up a charitable lead trust. Other possible assets to use might include an interest in a family business or an income-producing property. Ask your attorney for advice on which assets you should use.
  •  What steps should I take to set up a charitable lead trust?
    • A charitable lead trust is a legal document that should be crafted by an attorney knowledgeable in such matters. Consult with your advisors and attorney to find out what you need to do to set up a charitable lead trust.

By including The University of Alabama in your will or other estate plan, you qualify for membership in the Denny Society.  Click here for more information.

Contact our Planned Giving staff for more information.

<- Return to the ‘Tax Free Inheritance’ page.