Making a Planned Gift

Gifts that anyone can afford

Many supporters are surprised to learn that a planned gift to Nichols is within their reach. There are a number of ways to structure gifts based on your ability and interests.

Bequest

A bequest is a written statement in your will or revocable trust directing that specific assets, or a percentage of your estate, be transferred to Nichols School upon your death. A bequest signifies your commitment to Nichols and provides the opportunity to support future generations. A bequest is easy to understand and does not require you to part with your assets during your lifetime. Additionally, a bequest can be modified at any time.

Including Nichols in Your Will

The following are examples of bequest language:

Specific Bequest:

I give and bequeath to Nichols School, 1250 Amherst Street, Buffalo, New York, 14216 the following: ________________ (sum of money or asset) to be used for its general support (or for support of a specific fund or program).

Residual Bequest: a residual bequest comes to Nichols after your estate expenses and specific bequests are paid.

I give and bequeath to Nichols School, 1250 Amherst Street, Buffalo, New York, 14216 all (or ______ %) of the rest, residue and remainder of my estate, both real and personal, to be used for its general support (or for the support of a specific fund or program).

Contingent Bequest Language: Nichols School may be named as a contingent beneficiary in your will or personal trust if one or more of your specific bequests cannot be fulfilled.

If (insert name) is not living at the time of my death, I give and bequeath to Nichols School, 1250 Amherst Street, Buffalo, NY 14216, the sum of $ _______ (or all or a percentage of the residue of my estate) to be used for its general support (or for the support of a specific fund or program).

Retirement Plans

You can avoid paying high rates of tax and reduce your overall estate by making Nichols the residual beneficiary of all or part of your retirement assets. Donors should consult with their tax advisor regarding the benefits of such gifts.

Passing retirement assets along to heirs can be costly due to heavy tax consequences. Naming Nichols as the beneficiary of a qualified retirement plan can assist in accomplishing a charitable goal while realizing significant tax savings. The asset will automatically transfer to Nichols and will not be taxable in your estate or on your final income tax return.

Donors interested in naming Nichols as a beneficiary of a qualified retirement plan should speak with their tax advisor. Generally, all that is required is a change-of-beneficiary form from your plan administrator. Once you have named Nichols as a beneficiary of your retirement plan, please let us know so that we may include you in the William Nichols Society. If you would like, we are happy to assist you with the proper language for your beneficiary designation to Nichols School.

Charitable IRA Rollover

At the end of 2015, new legislation was passed that permanently allows individuals age 70 ½+ to make charitable gifts directly from a traditional IRA account to charity without incurring federal income tax on the withdrawal. If you are married, your spouse is also eligible for the tax-free IRA transfer.

How it works

  • You must be 70 ½ or older at the time of the gift.
  • Transfers must be made directly from a traditional IRA account or by your IRA administrator to Nichols School. Funds that are withdrawn by you and then contributed do NOT qualify.
  • Gifts must be outright to Nichols School.

Benefits – Qualified Charitable Distributions

  • Can total up to $100,000.
  • Are not included in your gross income for federal income tax purposes on your IRS Form 1040 (no charitable deduction is available, however).
  • Count towards your minimum required distribution for the year from your IRA.

Appreciated Securities

If you have securities that you’ve owned for more than a year with low cost basis, you should consider gifting these stocks, mutual funds, bonds, or other securities to Nichols. Nichols will sell the securities and use the proceeds to benefit its programs. In exchange, you will receive an immediate charitable income tax deduction for the full fair market value of the securities. Since there is no sale, there will be no capital gains tax due. A gift of appreciated securities can be very appealing for larger gifts because the deduction for the gift is often greater than the “cost” of the gift.

Life Insurance

A gift of life-insurance can be a meaningful gift with a long-lasting impact on the school. Donors who are looking to leave a meaningful legacy for Nichols, but do not want to immediately part with assets may be interested in a gift of life insurance as it is a simple cost-effective gift.

Donating an Existing Policy

Donors can transfer ownership of a paid-up policy to Nichols, making the gift eligible for a tax deduction equal to the policy's cash value.

Another alternative is to name Nichols as the designated owner and beneficiary and then continue making annual gifts to Nichols in the amount of the annual premium. Under this arrangement, the premium is paid Nichols, and the donor receives a tax deduction for the value of the premiums paid each year.

Designate Nichols School as a Beneficiary

One of the easiest ways to make a gift is to designate Nichols as a partial or full beneficiary of the policy. The donor retains ownership of the policy and the flexibility to change the beneficiaries if circumstances change. Any proceeds distributed to Nichols School will be exempt from estate tax in the donor’s estate, while providing a wonderful legacy for Nichols.

Gifts that pay you income and/or protect your assets

There are several planned giving options that help you meet your personal goals, provide you with income and tax savings while supporting Nichols at the same time.

Charitable Gift Annuity

A charitable gift annuity is a simple contract between you and Nichols School whereby you make an irrevocable transfer of cash or property to the school. In return, you, or a loved one, receive fixed income payments for life. Once the obligation is fulfilled, any remaining funds are used to benefit Nichols. In addition, you receive a charitable deduction for a portion of the gift and the annuity payments will be partially tax free for a period of time.

Charitable Trusts

A charitable trust is a trust that is created during your lifetime or at death that has a charitable beneficiary or a charitable remainder.

Charitable Remainder Trust

A charitable remainder trust is an irrevocable trust in which you transfer cash or other property to a trust, and in return, your named beneficiaries receive a fixed annuity or a variable amount over for life or for a period of years not to exceed 20 years. When the trust terminates, the remaining trust assets are transferred to Nichols in the donor’s name to establish a permanent legacy.

Charitable Lead Trust

A charitable lead trust pays a fixed annuity or a variable amount to Nichols for a specified term of years. At the end of the trust term the trust assets are distributed to your family or other named beneficiaries. Any appreciation that is earned by the trust passes tax free to the remainder beneficiaries.

Retained Life Estate

You transfer the title to your residence, farm or vacation home to Nichols and continue to live there for the rest of your life, or for a specified term of years. While you live there, you are responsible for all taxes and upkeep. At the end of your life estate the property is transferred to Nichols.

Establishing a retained life estate can be beneficial because you can give Nichols a significant asset but retain the security of using the property for rest of your life. Upon creating the life estate, you will receive an immediate tax deduction for a portion of the appraised value of your property. There is no requirement that you live in the property forever. You can terminate the life estate at any time and you may be able to receive an additional income tax deduction. Additionally, you and Nichols may jointly decide to sell the property and prorate the sales proceeds.