Gift Planning

Personal Giving Stories

Near 0% Interest Rates and Quest for Safety Lead to Second Gift Annuity

enta.jpgChinoree (Ben) Enta's first gift to the U of I was an insurance policy when his wife, Kimiyo, passed away in 2006. At age 90 and having no children, Ben was motivated to get his estate plans in order. He did so with the help of his attorney, and the U of I figures prominently in those plans. "My University of Illinois degree helped me in my career, so this was an opportunity to return the favor," Ben states.

The insurance gift was used to endow scholarships and fellowships in microbiology and chemistry, Ben's degree areas. Much of his estate gift will fund the Chinoree and Kimiyo Enta Japan House Endowment. "A Japanese cultural center on campus is unique and an asset to all students, not just the ones from Japan," Ben observes.

In addition to his estate plans, Ben has two charitable gift annuities (CGAs) with the U of I Foundation. His first one was in 2007. He was attracted by the tax savings and lifetime income. The immediate charitable tax deduction lowered his income-tax bill for the next couple of years and actually resulted in a refund, while the 8 percent rate was double the 4 percent his bank was paying.

Today, 4 percent interest from the bank is nearly unheard of. The account Ben closed in August for his second CGA was earning a measly 0.25 percent! Because he had significant other liquid assets, he used the $100,000 to establish his second CGA. Once again, he locked in a guaranteed 8 percent rate for the rest of his life, most of which, believe it or not, is tax-free. His tax bill is also destined to go down again because he received a charitable deduction of over $77,000, which could reduce his income taxes by $20,000 or so.

"When you consider the tax savings, high annuity rate and, maybe most important, the safety, a CGA with the U of I Foundation makes great sense in these uncertain economic times when interest rates are almost zero," Ben points out. "I would encourage anyone who is tired of these low interest rates to take out a gift annuity with the U of I Foundation," he concludes.

Contact us to get your annuity rate, see how much of it would be tax-free and find out how much you could lower your income-tax bill.

The U of I Foundation gift planning staff is pleased to answer your questions and offer assistance at any time. Please contact the Foundation to learn more.

 

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