Planned Giving
Planned gifts are vital to the school’s continued financial stability and academic excellence. You can support University Prep, preserve assets, and reduce tax liability by including the school in a bequest, or by making a gift of securities, real estate, or life insurance. Depending on the type of gift, you may:
- Reduce current or estate tax liability associated with charitable donations;
- Increase income to you or designated beneficiaries;
- Reduce or avoid capital gains tax if the gift is funded with appreciated assets; and
- Reduce probate and estate administration expenses.
Donors who make planned gifts to University Prep are essential to the school’s continued success. When you make a planned gift, you may choose to become a member of The University Prep Heritage Society. The Board of Trustees established this special group to honor individuals who invest in the school’s future. Heritage Society members are listed in the “Year in Review” (annual report), and are invited to an annual gathering. Planned giving donors can take pride in helping University Prep advance its mission to develop “each student’s potential to become an intellectually courageous, socially responsible citizen of the world.”
BequestsOne of the easiest ways to make a planned gift to University Prep is through a bequest in your will. Bequests come in many forms. The type of gift you choose to make and whether the gift is restricted will determine the wording of a bequest. It is essential that you discuss your wishes with a qualified attorney who can draft your will in compliance with federal and state laws.
We have provided below sample language for common types of bequests. These are illustrations only and not intended as legal advice. The school’s full legal name is University Preparatory Academy, and the federal tax identification number is 91-0974344.
Specific Bequest: “I hereby give, devise, and bequeath to University Preparatory Academy, an educational non-profit 501(c)(3) corporation located at 8000 25th Avenue NE in Seattle, Washington, for its general charitable and educational purposes, the sum of ______ Thousand Dollars ($____,000.00) or __________ (specific asset).
Residuary Bequest: “I hereby give, devise, and bequeath to University Preparatory Academy, an educational non-profit 501(c)(3) corporation located at 8000 25th Avenue NE in Seattle, Washington, for its general charitable and educational purposes, all the rest, residue, and remainder of my estate after specified obligations, taxes, and expenses have been paid.”
Percentage Bequest: “I hereby give, devise, and bequeath to University Preparatory Academy, an educational non-profit 501(c)(3) corporation located at 8000 25th Avenue NE in Seattle, Washington, for its general charitable and educational purposes ______ percent of my adjusted gross estate.”
Contingency Bequest: “In the event that ______ does not survive me, I give ($____ dollars) or (specific asset) or (____% of the rest, residue, and remainder of my estate) to University Preparatory Academy, an educational non-profit 501(c)(3) corporation located at 8000 25th Avenue NE in Seattle, Washington, for its general charitable and educational purposes.
If you name University Prep in your will, we would appreciate receiving a copy of the portion that mentions the school. In this way, University Prep can acknowledge your bequest intentions, invite you to become a member of The Heritage Society, and send you invitations to special events.
Life Insurance
To receive a charitable tax deduction, you must name University Prep as both owner and irrevocable beneficiary of the policy, and pay premiums in full. If you choose to pay premiums over a period of years, each premium payment will be eligible for a charitable deduction.
Charitable Trust
A charitable trust owns the assets that you irrevocably transfer to the trust. Charitable trusts can be established for the life of a single beneficiary, or for a specific period of time. Beneficiaries may be the donor, donor’s spouse, or another person(s). The two main types of trust, Charitable Remainder Trust and Charitable Lead Trust, are described below.
Charitable Remainder Trust: You as donor irrevocably transfer assets to a trust for which you, or someone selected by you, are the trustee. The trust distributes income to you and/ or other beneficiaries for your lives and or a specified term of years. Upon the death of the beneficiaries or termination of the agreement, the remaining assets transfer to University Prep. A charitable trust removes assets from your estate, and you will receive a current charitable deduction. There are two types of remainder trusts:
1.Charitable Remainder Unitrust: The unitrust pays a set percentage of income based on the fair market value of trust assets each year. You may add assets to a unitrust, thus realizing additional charitable deductions.
2. Charitable Remainder Annuity Trust: The annuity trust pays income based on a percentage of the trust’s initial value. The annual payment is fixed at the time the gift is made and never varies. You cannot add assets to an annuity trust.
Charitable Lead Trust: A charitable lead trust is the “opposite” of a charitable remainder trust. You transfer assets into a trust that pays income to University Prep for a number of years. At the conclusion of the trust agreement, the remaining assets pass on to you or other beneficiaries (e.g., heirs) with no or greatly reduced tax consequences (e.g.,estate tax). Similar to charitable remainder trusts, there are two types of charitable lead trusts:
1.Charitable Lead Unitrust: The unitrust pays a percentage of income based on the fair market value of trust assets each year. You may add assets to a unitrust, thus realizing additional charitable deductions.
2. Charitable Lead Annuity Trust: the annuity trust pays income based on a percentage of the trust’s initial value. The annual payment is fixed at the time the gift is made and never varies. You cannot add assets to an annuity trust.
Retirement Plan and Account Beneficiary Designations
You can make a significant gift to University Prep by naming the school as beneficiary of your IRA, 401(k), corporate pension, or other qualified retirement plan. At death, taxes can greatly reduce the amount transferred from a retirement plan to your heirs. By naming University Prep as the remainder beneficiary of a retirement account, you can avoid most taxes.