Gift Planning at The University of Texas at Austin
Retirement Plan Assets
Retirement plan assets are a great way to support the work at The University of Texas at Austin because they not only help support the mission, but they also can provide tax relief for your loved ones.
Money in an employee retirement plan, IRA or tax-sheltered annuity has yet to be taxed. When a distribution is made from your retirement plan account to a beneficiary, that person will owe federal income tax.
Consider leaving your loved ones less heavily taxed assets and leaving your retirement plan assets to The University of Texas at Austin to support our work. As a nonprofit organization, we are tax-exempt and will receive the full amount of what you designate to us from your plan. You can take advantage of this gift opportunity in the following ways:
Name us a beneficiary of your plan. This requires you to update your beneficiary designation form through your plan administrator. Here you can designate The University of Texas at Austin as the primary beneficiary for a percentage or specific amount. You can also make us the contingent beneficiary so that we will receive the balance of your plan only if your primary beneficiary doesn't survive you.
With the IRA Charitable Rollover, if you are 70½ years old or older, you can take advantage of a simple way to help those we serve and receive tax benefits in return. You can give up to $100,000 from your IRA directly to a qualified charity such as The University of Texas at Austin without having to pay income taxes on the money.
Fund a testamentary charitable remainder trust. When you fund a charitable remainder trust with your heavily taxed retirement plan assets, the trust will receive the proceeds of your plan. The trust typically pays income to one or more named beneficiaries for life or for a set term of up to 20 years, after which the remaining assets in the trust would go to support The University of Texas at Austin. This gift provides excellent tax and income benefits for you while supporting your family and our work.
A donor advised fund. When retirement plan assets pass to your heirs, distributions are taxed as ordinary income. This income tax burden can be substantial, greatly reducing the value of the intended gift. Instead, you can designate your donor advised fund as the beneficiary of all or a portion of your retirement plan assets. Your fund receives the full amount of the gift and bypasses any federal taxes.
Tax Relief for Your Loved Ones
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“For many years I’ve had the university in my will,” says Duke DeGrassi, who earned an accounting degree from Texas in 1969. “I had always hoped to set up some form of scholarship, and fortunately UT called on me and told me there’s a way to get started before you pass away. I turned 70 this year so it worked out really well with my IRA.”
Duke is giving a set amount each year for the next five years, and his will provides that when he passes, there will be another gift. But their scholarship will be set up by the end of this year. “It was a great boon for [my wife Gayla Lewis and I] to be able to do that now so we can see what’s going on for a few years instead of waiting until we’re deceased,” he says.
Gayla adds, “It’s the type of vehicle that really appeals to us — to help kids that otherwise wouldn’t have the opportunity to attend a university of this stature.”
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