Through planned gifts, Bridgewater's donors arrange a gift to the College for realized benefit in the future.
Planned giving offers potential benefits such as:
- Tax advantages that help reduce the donor's income and avoid capital gains taxes
- Increased current income for the donor and others
- Transferred assets to family occur at a reduced tax cost
Types of planned gifts include:
At Bridgewater, donors who have included the College in their estates are recognized as a distinguished group of benefactors through a Codicil Club membership.
Gifts associated with a donor's will and final distribution of an estate offer the donor and the College great potential. A bequest is an attractive option when a donor is currently unable to make an outright cash gift, but wishes to make a contribution to Bridgewater in a meaningful way. A specific bequest will involve donating a set amount or a percentage of assets from an estate to the College.
Residual bequests are left to the College after all the donor's debts, expenses, and taxes have been paid from the estate.
A trust is a legal agreement that specifies how the assets placed under the trust will be managed. A living trust can be established to take effect during a donor's lifetime. Benefits include possible savings in estate taxes if a charity is the beneficiary of the trust remainder. Also, the terms of the trust can be changed at any time.
Giving through a life insurance policy is simple and is a way to give with little expenditure. Whole life insurance can be offered by naming Bridgewater as the irrevocable owner and beneficiary.
Charitable contributions from the donor to the College in the amount of any premiums may be required with gifts of life insurance policies.
Charitable Remainder Trusts
These trusts enable a donor to achieve a variety of financial goals while making a significant gift to Bridgewater. Through a charitable remainder trust, a donor can contribute assets to the trust and receive a life income. The remaining principal is earmarked for Bridgewater College. There are two types of charitable remainder trusts:
- The Unitrust - allows for a fixed percentage of the fair market value of the assets to be paid to the donor.
- The Annuity Trust - allows the donor to receive the annual income as a fixed payment equaling at least 5% of the value of the asset at the time the deferred-giving agreement is signed.
Advantages of a charitable remainder trust include an income stream for life, avoidance of taxes on capital gains for appreciated securities or real estate, a reduction of estate taxes, and a charitable contribution income tax deduction based on life expectancy.
Charitable Lead Trusts
This trust is the exact opposite of the charitable remainder trust. It, too, is a deferred gift, but it offers the College an income for a period of time, after which individual beneficiaries receive the remainder of the trust. This type of gift allows the donor to share surplus income with the College, then pass on the principal to family with greatly reduced gift and estate taxes. The donor may also opt to retain the asset after the term of the income stream is completed.
A popular way of establishing an immediate or deferred gift annuity is to make a gift of cash or appreciated securities to the College. Bridgewater then pays the donor a guaranteed fixed percentage of the value of the gift on either a monthly, quarterly, semi-annual, or annual basis throughout the lives of one or two annuitants.
For each gift annuity agreement, Bridgewater is responsible for the management of all contributed assets. The donor's return is backed by the full-faith credit of the College and is guaranteed for life.
The Bridgewater charitable gift annuity offers several advantages, including guaranteed fixed income for life and a charitable tax deduction for the gift. Also, if funded with appreciated securities, capital gains taxes are reportable over the donor's lifetime. Gifts made are permanently removed from the donor's estate for estate calculation purposes.
Retained Life Estates
A home can be another way to give to Bridgewater and benefit personally from the tax deduction for the property's discounted value. With a retained life estate, a donor can give a residence to the College and continue to reside in or rent the property. Also, money spent on property maintenance can be a charitable contribution to the College.
Contact the office of institutional advancement at 540-828-5448 for more information on any of these planned giving opportunities.