January 10, 2024

Now that you’ve opened your 2024 calendar, it’s a great time to evaluate your estate planning wants and needs, which can change through life’s seasons. Maybe over the past year, Aunt Sally died and left her prized jewelry collection to you—or you’ve retired and found that your stock portfolio is unbalanced with your former employer’s stock.

Fortunately, the Texas A&M Foundation staff has just about seen it all, having worked with countless Aggies and friends of Texas A&M University over the years on a variety of estate planning scenarios to meet donors’ needs.

Kevin Westerman ’11, the Foundation’s assistant vice president of planned giving, summarized the big picture of what his team does. “Our goal is to help donors identify and support their philanthropic priorities at Texas A&M while working with them and their advisors to make wise estate planning decisions,” he shared. “Whether someone is looking to make a charitable gift while helping their money last throughout retirement, let go of unwanted properties or identify the most tax-efficient way of determining ‘who gets what,’ our team is here to help them with a rewarding solution.”

Let’s explore some of the most common estate planning questions the Foundation’s team answers.

Donors Asked:

I’m interested in creating a philanthropic legacy plan but need an immediate tax deduction. What do you suggest?

A donor-advised fund is a great way to do both. These investment funds are created by you and maintained by a financial organization’s 501(c)(3) arm, so initial and additional contributions to the fund are considered tax-deductible charitable contributions. Once established, you can send “grants” to support your favorite charities. This type of investment can also create a philanthropic legacy because you can name specific charities as the ultimate beneficiary of your donor-advised fund to amplify your impact after your lifetime.

Can I donate real estate, mineral interests and personal property, such as art and collectibles?

Yes, you can gift all of these assets to the Texas A&M Foundation. Specifically, real estate and personal property will be sold, and the proceeds used to support your specified area of interest at Texas A&M. 

Which assets should be given to family members, and which should go to charity?

Each individual’s financial situation varies, but our role as planned giving professionals is to help maximize your personal and philanthropic impact. For example, tax-deferred assets like an individual retirement account (IRA), in general, are often a better fit for charitable support, while other assets—such as a stock portfolio, life insurance or real estate—may be more effective gifts for individual family members.

I’m worried about outliving my money or having enough for retirement, but I still want to make a charitable gift. What do you suggest?

Two estate planning options—beneficiary designations from retirement accounts and a general bequest from a will or living trust—address this common concern. Both options are revocable, so designated funds will only be gifted to the charity if still available after your lifetime. These are also two of the most common planned giving methods donors use to support Texas A&M.

What if I need a tax deduction in 2024 to offset a taxable event?

Irrevocable gifts such as a charitable remainder trust or a charitable gift annuity (CGA) offer an immediate tax deduction while also providing income payments for a term of years or even a lifetime. And great news: Effective Jan. 1, 2024, suggested CGA rates increased by about 0.4%, meaning a better return on your investment.

Additionally, transferring ownership of a life insurance policy to a charitable organization can provide an immediate tax deduction and can also result in subsequent deductions for your annual premium payments.

I have appreciated stock that will be heavily taxed if sold, but I also want to diversify my investments for retirement. What are my options?

You can gift stock to a charitable remainder trust or charitable gift annuity and receive an immediate income tax deduction while also bypassing capital gains tax. The stock is sold, and your resulting funds are invested in a diversified way to maximize both your retirement income and the charitable remainder.

I want my estate to go to my family and also support charity. How can I do that?

Do you want to give to family then charity or family and charity? It’s important for you to consider how you want to provide for your estate’s beneficiaries because everyone’s circumstances are unique. Your answer will help you, your planned giving team contact and your advisors consider various planned giving methods and implement the best estate plan for you, your family and your chosen charities.

I’m required to take a mandatory distribution from my IRA but don’t need the income. Can I use the distribution to make a charitable gift?

Yes. Qualified charitable distributions using your IRA allows you to limit your taxable income while satisfying the distribution requirements. This is one of the most popular and tax-efficient ways to make a gift to the Texas A&M Foundation.

I don’t have children. Who should I list as my beneficiary?

If you don’t have individual heirs, you can leave your estate to your favorite charitable organizations like the Texas A&M Foundation, which can accept a variety of assets and receive them tax free. This means the full value of your assets can be used toward your philanthropic passions in Aggieland.

How can I provide for my pets if they outlive me or I can no longer care for them?

You can make a charitable gift to the Texas A&M Stevenson Companion Animal Life-Care Center so your pets can receive care for the remainder of their lifetime. They may even be roommates with retired Reveilles!

I have a business and am worried about potential tax implications when I sell it. Any thoughts?

First, congratulations on building a successful business! It’s not an easy decision to sell your business, but there are a number of charitable options, including gifting a portion of your business interests or donating proceeds from the sale. Our team can partner with you to identify what’s most beneficial for your unique situation.

Is there anything else new or on the horizon that I should consider?

The estate tax threshold is currently scheduled to sunset at the end of 2025 unless Congress steps in. This change may have significant ramifications for donors. Check with your estate attorney or financial advisor to determine the best plan forward.

If you are required to take minimum distributions from your IRA and want to make a charitable gift, two recent tax changes may be of interest. Effective Jan. 1, 2024, the IRA qualified charitable distribution (QCD) limit increased to $105,000. Also, if you are interested in using an IRA QCD to fund a charitable gift annuity, you can now make a one-time gift of $53,000, a $3,000 increase from 2023.

Did any of these questions ring a bell, or do you have another estate planning challenge on your mind? We might have a charitable solution for you! Please contact Kevin Westerman ’11 below.

Disclaimer: This article is intended to share general information on topics related to estate planning and should only be used or referenced as a source for general advice. Readers should seek advice from their personal representative to better understand the best plan for their individual needs.