Planned Gift Options at New England Conservatory

Bequests.  A bequest is a gift of any asset through a will or other estate planning instrument that will be payable at the donor’s death.  It may be for a certain dollar amount, specific asset (e.g., piano) or a percentage of the residuary estate. 

Charitable Gift Annuities.  A charitable gift annuity is an irrevocable contract between a donor and New England Conservatory.  In exchange for the donor’s irrevocable transfer of money or property to NEC, the Conservatory promises to pay the donor (or a survivor, if designated) fixed annual payments for life.  The recipients of the annuity payments must be at least 55 years of age and the minimum contribution for an annuity is $10,000.  A portion of the gift will qualify for a federal charitable tax deduction in the year of the gift and a portion of the annuity payments will be tax exempt for a number of years. 

Charitable Lead Trusts.  Under a charitable lead trust, the donor transfers assets to an irrevocable trust for a period of years.  A fixed percentage of the income earned by the trust or a fixed percentage of the assets of the trust will be paid to NEC each year. At the end of the trust term, the principal reverts to the donor.  The minimum amount to establish a charitable lead trust is $500,000. 

Charitable Remainder Trusts (Unit or Annuity).  Under a charitable remainder trust (“CRT”), assets are irrevocably transferred to a trust with NEC named as the remainder beneficiary.  The trust may make payments to other individuals or organizations during the life of the trust but the principal of the trust (the remainder) will be distributed to NEC when the trust terminates.   Periodic payments will be made to a designated beneficiary or beneficiaries.  In the case of a “unitrust” CRT, the amount available for payment to the beneficiary/beneficiaries is based on a fixed percentage of the trust assets and the payment amounts can vary from year to year (e.g., at least 5% of the trust assets determined annually will be used for beneficiary payments).  Under an “annuity” CRT, the beneficiary payments are fixed.  The minimum amount of assets for establishing a CRT with NEC is $100,000.  Generally, the beneficiaries must be at least 55 years old but the age limit will not apply if the trust term is for a set term of years rather than tied to a beneficiary’s life.  The donor may qualify for a charitable tax deduction when assets are irrevocably transferred to the CRT.

Deferred Charitable Gift Annuities.  The deferred charitable gift annuity works in the same manner as the traditional charitable gift annuity except that the annuity payments will start at a later time than the date of the gift.  The minimum age for entering into a deferred charitable gift annuity is 40 years and the minimum age for starting the annuity payments is 55 years.  A contribution of at least $10,000 is required.

Life Insurance.  Donors may name NEC the beneficiary of their life insurance policy, thereby ensuring a gift to NEC at the donor’s death.  Donors may also make a current gift of life insurance by irrevocably naming NEC as beneficiary of the policy and transferring ownership of the policy to NEC. 

Pooled Income Fund.  In exchange for irrevocably transferring assets (usually cash or securities) to the NEC Pooled Income Fund, donors acquire “shares” in NEC’s Pooled Income Fund.  The donor’s assets are commingled with the assets of other participants in the Pool and are professionally managed by Mellon Financial.  Donors receive income payments based on the Pool’s investment results.  They also qualify for a charitable tax deduction in the year they make an irrevocable contribution to the Pool.  The minimum initial amount that can be contributed to the NEC Pooled Income Fund is $5,000.  Additional contributions of $2,000 or more are permitted.  Contributors to the Pooled Income Fund must be at least 55 years of age.

Real Estate (Retained Life Estate).  Donors may contribute a personal residence or farm to NEC while reserving the right to occupy or use the property for a term of years or for life.  The donor may qualify for a charitable tax deduction when the property interest is irrevocably transferred to NEC.

Retirement Plans.  Naming New England Conservatory as a primary or contingent beneficiary for all or part of an IRA, 401(k), 403(b) or similar qualified retirement plan can be an excellent way to support NEC and minimize income and estate taxes.  Beneficiary designation forms can be obtained from the plan administrator.

2011-01-07


LIFE IS A LOT LIKE JAZZ. IT'S BEST WHEN YOU IMPROVISE. GEORGE GERSHWIN