A Parting Gift...

Ever since Andrew Carnegie founded Carnegie Mellon with a letter to Pittsburgh Mayor William Diehl in November 1900, pledging "My heart is in the work," hundreds of loyal alumni have chosen to give the one final (and perhaps most important) gift that they will ever give to Carnegie Mellon. They made a bequest.

Bequests to Carnegie Mellon through your Will and/or through tax-deferred retirement plan assets, insurance and other means, represent a personal and powerful way to ensure that the university will offer future generations the same advantages that it gave to you. By including Carnegie Mellon in your estate plans for life's end, you testify to its importance in your youth and throughout your life. A bequest is an alumnus or alumnae's last, most meaningful sign of affection for, as well as a vote of confidence in, their alma mater.

Bequests through Your Will or Living Trust

Bequests and trust distributions to Carnegie Mellon provide important future support for the university's academic programs, building projects and endowment. After providing for those close to you, you can make a provision in your Will for Carnegie Mellon to receive a gift through your estate. Your bequest will help ensure the future fiscal stability of Carnegie Mellon while providing you with significant personal and estate tax benefits.

Some benefits of providing for Carnegie Mellon in your Will include:

• your taxable estate is reduced by the amount of your cash gift or the fair market value of your gift of securities or other property
• there is no limit on the amount that can be deducted for estate tax purposes
• you can change the amount designated as your gift at any time
• you have the personal satisfaction of knowing your bequest will provide significant future support for Carnegie Mellon

Types of Bequests:

• Cash Bequest - a specific dollar amount
• Specific Bequest - a specific asset, such as stock, real estate or personal property
• Residuary Bequest - a percentage of estate after specific bequests, debts, taxes and expenses have been paid
• Contingent Bequest - takes place only if beneficiaries named in Will pre-decease you
• Testamentary Life Income Plan - designating one or more beneficiaries to receive income for life, from a life income plan funded with assets from a bequest through your Will or by naming a charitable trust as the beneficiary of some or all of your retirement plan assets. Upon the demise of the life income beneficiaries, the remaining assets are transferred to Carnegie Mellon.

How to include a bequest to Carnegie Mellon in your Will

You may include a provision for Carnegie Mellon whether or not you plan on rewriting your Will. A bequest to Carnegie Mellon can be established by inserting language into a new Will or by adding a codicil to your existing Will.

The following is an example of suggested bequest language:

Carnegie Mellon's Office of Planned Giving can also provide you with specific language for a restricted gift and appropriate language for a testamentary endowed fund.

Make a Gift To Carnegie Mellon Through Your Retirement Plan

Making a contribution to Carnegie Mellon can help to avoid substantial income and estate taxes that may use up as much as 80 percent or more of retirement plan assets when an individual heir is named as the beneficiary of those assets.

Taxes:

Retirement assets could be subject to a three-way tax. For example, the full date-of-death value of retirement savings is subject to federal estate tax at rates as high as 55 percent. And, both federal income tax and state income tax, where applicable, will be due on retirement plan death benefits costing as much as 40 percent or more of the distributions.

Your Options:

If you leave retirement plan savings to heirs, they might be able to "keep" as little as 20 cents on a dollar, in a worst case scenario.

That's why it is increasingly attractive to designate Carnegie Mellon as the beneficiary of all or a portion of these retirement plan assets. The full value of the retirement plan assets, undiminished by federal and state income and estate taxes, would be available for use by Carnegie Mellon.

Other estate assets — cash, appreciated securities, life insurance and real estate — could then pass to your heirs. While estate taxes may apply to those assets they do not carry the extremely onerous income tax implications of retirement plan assets. Further, appreciated assets such as securities and real estate receive a step up in basis when they pass to heirs upon death. The heirs' assumed cost basis in the asset(s) steps up to the fair market value at the death of the decedent.

Take action now

It is important that you name Carnegie Mellon University the specific beneficiary on the retirement plan itself so that it will not be considered a probate asset. It is advisable to state in your trust or Will that you have made a specific beneficiary designation of your retirement plans. Consult with your financial and legal advisers to examine the parameters of the retirement plans and the tax ramifications so that you will meet your estate planning goals and objectives.

Confidentiality

For effective university planning and in order to ensure that your wishes are followed, we encourage you to let the Office of Planned Giving know that you have included Carnegie Mellon in your Will or in a beneficiary designation. Be assured that all conversation and correspondence are entirely confidential.