Bequests and life income gifts FAQ

You may make a life income gift to Norwich University by irrevocably transferring securities, money, or other marketable property to the University.

Charitable remainder trusts and charitable gift annuities are examples of life income gifts. In a charitable gift annuity, Norwich manages the investment of the trust assets and pays a guaranteed fixed income to you, your designated beneficiaries, or both. The income payments continue for the beneficiary’s life or for a term of up to 20 years. After the trust terminates, Norwich receives the fund principal.

A charitable remainder trust is managed by a third party trustee and pays you income based on the value of the trust or the net income earned by the trust. This type of life income arrangement does not guarantee you income for life. After the trust is terminated, Norwich receives the remaining fund principle. You will receive an immediate income tax deduction for both types of gifts as well as avoid an immediate capital gains tax liability on appreciated securities.

Gifts to Norwich, as to other charitable organizations, are not subject to gift or estate taxes. For example, a $10,000 bequest to a charity results in the charity receiving the full $10,000, free of tax. Since estate tax rates are as high as 55 percent, that same gift made to an individual (other than a spouse) may result in $5,500 going to the IRS and $4,500 going to that individual.

In the case of life income gifts, a tax deduction for the present value of the “remainder interest” in the donated assets will be given to the donor. In addition, the sale of appreciated assets within a trust used to fund a life income arrangement does not trigger capital gains or other income taxes on the sale.

Norwich University has an educated staff of planned giving professionals who can help you to coordinate the best gift for you to give Norwich University. Planned Gifts are described as a gift that gives more but costs the donor less, while unplanned gifts cost the donor more but give the charity less. Norwich can help you determine what the best gift is for you and your particular circumstances so that you may minimize taxes and give the greatest gift possible to Norwich.

Even if you are planning on setting up a trust or bequest with an outside attorney, we recommend that you or your advisor contact us to discuss the details so that we may ensure that your gift will be used as you intend.