Make the Most of Options for Making a Difference

As an alumnus of the Stern School of Business and the Graduate School of Law, and as a Life Member of the NYU Board of Trustees, I am happy to once again share year-end tax planning suggestions with you.

Earlier this year Americans filed their first tax returns under the new tax law that had been enacted at the end of 2017, and many taxpayers felt its impact. Tax advisors have worked with their clients throughout this year to develop strategies and ideas to minimize the burden that the new law has caused.

The new law significantly reduced the number of taxpayers who itemize their deductions, pushing them into using the standard deduction. For those who continue to itemize deductions, charitable donations remain deductible as in the past and reduce taxes on their 2019 returns.

Many taxpayers who are required to take annual IRA distributions have found that they can maximize tax benefits by using their IRA to make their charitable gifts—even if they do not itemize their deductions.

Alumni have found that there are advantages to developing a strategy for shaping a personal legacy to NYU. Consider the many ways, described briefly in our brochure, that your gifts can provide additional rewards to you and your family.

The bedrock for all charitable giving is heartfelt support for a mission, and NYU is deeply grateful to alumni, faculty, and friends like you who support the University’s students and academic programs year in and year out. Your generosity allows NYU to make a meaningful difference in many lives through teaching, research, and patient care.

Use Your Will or Living Trust to Shape Your NYU Legacy

Wills and living trusts are estate planning documents used to pass assets on to beneficiaries. Although a living trust can also serve a variety of purposes during life, for estate settlement purposes, either a properly drafted will or living trust is a dependable way to make sure your wishes are ultimately carried out. Wills and trusts must meet certain legal requirements, so your attorney should draft or update your will or living trust. Without a valid will or living trust, laws of intestacy prevail and the state where you reside distributes your assets according to a fixed, statutory formula.

What is best for you?

When it is time to settle your estate, a will is submitted to probate court. The process of verifying the authenticity of a will is a matter of public record, which means there is virtually no privacy regarding the distribution of assets.

For this reason, you may prefer to use a living trust rather than a will in your estate planning. A living trust provides more privacy at death because it avoids the probate process. The drawback, when compared to a will, is that living trusts are more expensive to administer since they are more complex and may require more dutiful attention over a lifetime. Your attorney can help you decide which is best—many planners use a combination of these two versatile planning tools.

Giving options through your will or living trust

There are many options to consider as you make charitable gifts in your will or living trust:

• Distribute a specific asset or pay a specific amount to NYU. You can choose to support an endowment fund if you like.
• Allocate a percentage of your estate to be distributed to NYU. If the value of your estate increases over time, the value of the gift also increases.
• Designate that NYU receives the residue of your estate—“what is left” after all other obligations have been met (costs, debts, taxes, and other specific designations).

Meet Charitable Goals and Receive Income from Your Gift

As you consider personal planning needs and philanthropic goals, it may benefit you to know the role life-income gifts can play in your overall strategy. Life-income gifts are unique because they make it possible to support NYU, qualify for a tax deduction, and receive income from your gift.

Payments that begin now or later

One of the important aspects of planning a life-income gift is the ability to choose when the income begins and how payments are made. We can provide illustrations showing payment and tax deduction figures based on your gift amount and personal objectives.

One or more beneficiaries

You can design a plan to provide payments to yourself and others. There are some variations among the different types of plans, but it is possible to design a plan to provide payments only to you, only to another, or to you and other beneficiaries.

Benefit from a tax deduction

Life-income gifts qualify for an income tax charitable deduction based on the present value of the gift you make. There may be other tax benefits to consider as well, including favorable taxation of the payments you receive.

The charitable gift annuity: simple and sensible

The charitable gift annuity is the simplest life income gift to establish. For many, it is a sensible way to make an important gift. There can be one income beneficiary or two, and the lifetime payments can begin immediately or be deferred to a later time. Generally, deferring payments results in higher payments compared to starting payments immediately.

Please contact us if you would like to know more about charitable gift annuities and other life-income gifts.

You may also visit giving.nyu.edu/giftplanning/ to learn more.