Bequests: The Gold & White Society

A gift by bequest for the benefit of the College through the RIC Foundation can be included in the body of your existing will or by a simple clause, a codicil, included by your attorney. Bequests to the RIC Foundation will reduce the federal and estate taxes and, in most cases, state taxes on your estate.

Over the years, generous alumni and friends of Rhode Island College have shown their support in many thoughtful ways: cash gifts, gifts of real estate and stock, and gifts of homes and yachts. In addition, many have chosen to make substantial gifts in the form of bequests in their will. Such bequests are managed through the Rhode Island College Foundation on behalf of the College.

Bequests are made by alumni and friends from all walks of life who want to perpetuate their interest in the College. Some are wealthy, many are not, but they all care about the College. The support that the College receives through bequests is an important element in the institution's unending effort to provide a quality education to deserving students.

The cost of a college education will continue to climb. Consequently, there will continue to be a great need for scholarships and for support in the areas of library holdings, distinguished professorships, visiting scholars and lecturers, cultural activities, educational equipment, physical facilities, and research. You may wish to consider a bequest as a way to make your mark on the future of the College.

• Making a Will
• Use of a Codicil
• What May Be Given
• Bequests and Estate Taxes
• Forms of Bequest
• Examples of Bequests
• Unrestricted Bequest
• Restricted Bequest
• Specific Bequest
• A Bequest Naming the RIC Foundation as a Contingent Beneficiary
• Residual Bequest
• Life Income Bequest
• Opportunities for Gifts and Bequests
• Testator Honor Roll: Do You Qualify?
• Donor Benefits of Bequests
• Giving Through Your Retirement Plan
• Life Insurance Gifts

Making a Will

As you know, a will can insure that your financial affairs are settled and your intentions carried out according to your wishes. Your will, therefore, is a matter of practical business and not something reserved for the wealthy or to be postponed until old age. And, as a matter of practical business, you should review your will periodically, revising it to reflect changed marital status, deaths, additions to the family, changes in the size of your estate, and so on.

Use of a Codicil

A codicil is an addition to an existing will explaining, adding to, or subtracting from it. This requires a lawyer's help and the same formality and execution as a will.

What May Be Given

Bequests to the RIC Foundation may consist of specific property, real or personal, as well as money. Real property is land and anything that is attached to it. Personal property includes everything else-securities, insurance policies, books, antiques, jewelry, etc. If securities are given, appropriate wording should be used in the will to safeguard your intentions. Otherwise, during the period of time between your death and your will's execution, such events as stock dividends, stock splits, or mergers may reduce the amount of the gift you intended. The Rhode Island College Foundation welcomes gifts of real estate, wherever they are located, if the Foundation is not required to keep the property.

Bequests and Estate Taxes

Bequests to the RIC Foundation will reduce the federal estate tax and, in most cases, state taxes on your estate.

Forms of Bequest

• A bequest is a legal provision made by will, naming, for instance, the Rhode Island College Foundation as recipient of the whole or a portion of an individual's personal estate. A bequest can take many forms: unrestricted, specific, testamentary trust, life income, residual, or contingent.
• Unrestricted Bequest: the simplest form of bequest whereby a person bequeaths a stated amount to the RIC Foundation without any conditions attached.
• Specific Bequest: permits an individual to leave a specific dollar amount, or a stated percentage of his or her entire estate, a specific asset, or a collection of assets to the RIC Foundation.
• Charitable Testamentary Trust: creates and distributes income to be paid to a named beneficiary )spouse, child, parent, relative, or friend), and, at the death of this beneficiary, the remainder of the trust becomes the property of the RIC Foundation. The trust may take one of two forms: a Charitable Remainder Annuity Trust or a Charitable Remainder Unitrust. Each has its own tax advantages.
• Life Income Bequests
• Residual Bequest: *a conditional bequest based on the balance of the estate after specific bequests have been satisfied. At that time, the RIC Foundation would receive all or a percentage of the balance that remains.
• Contingent Bequest: *a bequest which reflects an "if possible" situation. The RIC Foundation will receive a bequest if the beneficiary of a specific bequest predeceases the maker of the will.

*Anyone can have bequests of this type added to their existing will at nominal cost without disturbing the existing estate plan. Please consider adding to your will a contingent or residual bequest clause naming the RIC Foundation.

Examples of Bequests

A will should always be drawn by or with the advice of an attorney. A will must not only be clear, but executed to meet all legal state requirements. This web site is intended only to provide general information for those who may wish to make a gift for the benefit of Rhode Island College through their will.

Unrestricted Bequest

I give to the Rhode Island College Foundation_______dollars ($) or _______% of my net estate to be used for its general purposes.
Unrestricted bequests are always welcome. At the discretion of the Foundation's trustees they may be expended for any immediate and pressing need approved by the College or reserved for future use.

Restricted Bequest

I give to the Rhode Island College Foundation_______dollars ($) or_______% of my net estate, only the income to be used for (state purpose)_______of Rhode Island College. (The following sentence is optional.) This gift is in memory of (name)_______and should be known as the_______Fund.
Such a bequest creates a permanent endowment fund. The fund can be named for the donor or for someone he or she designates. Income from the fund is available only for the stated purpose. Investment of the fund is the responsibility of the Foundation's Investment Committee.

Specific Bequest

I give to the Rhode Island College Foundation_______dollars ($) or _______% of my net estate. This gift shall be used both as to principal and income for (describe the specific purpose to be served by the gift)_______.
A specific bequest may be used to construct or add to a building or for the restoration of one. It may be used to purchase equipment, books, or be added to student loan or scholarship funds. Some specific bequests, because of undue restrictions, may have their usefulness demeaned by changing times and needs. Use of a corrective clause is recommended.

A Bequest Naming the RIC Foundation as a Contingent Beneficiary

I give to the Rhode Island College Foundation as a contingent beneficiary _______dollars ($) or _______% of my net estate.
The donor's will should provide for the contingency that named beneficiaries may not survive him. Should this happen, his estate will be distributed by the Probate Court as intestate property-often contrary to the donor's wishes. To avoid this, a donor may name the RIC Foundation as a contingent beneficiary. It will be most appreciated if RIC alumni and friends will include this clause naming the RIC Foundation in their wills.

Residual Bequest

All the rest, residue, and remainder of my estate, both real and personal, wherever situated, I give, devise, and bequeath to the RIC Foundation.

Life Income Bequest

I give, devise, and bequeath to the Rhode Island College Foundation the sum of _______dollars ($) (and/or securities or other property herein described, namely_______) to be used for its general purposes,

(Pooled Life Income Plan Option)

Provided, however, if (my spouse) survives me, the Foundation shall invest the proceeds of this bequest in its Pooled Life Income Fund and shall pay the income to (my spouse) during his/her life.

(Charitable Gift Annuity Agreement Option)

Provided, however, if (my spouse) survives me, the Foundation shall issue a Charitable Gift Annuity agreement to (my spouse) in life face amount, at the rate prevailing for his/her age at the time of my death, payments to be made to him/her as long as he/she lives.

Appropriate wording for a testamentary Unitrust or Annuity Trust is available upon request.

Opportunities for Gifts and Bequests

The extensive and varied nature of Rhode Island College's educational programs and facilities offers a wide range of opportunities for those who wish to support a useful purpose with a deferred gift. If you believe in education, Rhode Island College will be proud to carry your ideals in your name throughout its future.

Testator Honor Roll: Do You Qualify?

Gold & White Society testators are individuals or estates naming the College as beneficiary. Testator membership in the exclusive Gold & White Society is an honor extended to alumni and friends of the College who have made a provision in their wills to benefit RIC through the RIC Foundation. If you write to us, letting us know that you have made a provision in your will to benefit the College, we will enroll you immediately as a testator.

Gifts by will for Rhode Island College should be made to the Rhode Island College Foundation which has a charter for this purpose under state law. The Rhode Island College Foundation is a tax-exempt corporation under Subsection 501 © (3) of the Internal Revenue Service code and is exempt from all state and local taxes. All gifts to the Foundation are approved deductions according to the schedules established under income tax regulations.

Donor Benefits of Bequests

• No financial commitment while living
• Possible probate and estate tax reduction

Giving Through Your Retirement Plan

Because of the outstanding tax benefits granted to those who use IRAs, 401(k)s, 403(b)s, and other "qualified pension plans," these instruments have become very popular. Here, for the purposes of convenience, we will refer to all these plans as IRAs. Most IRA funds avoid income tax and grow tax-free. Also, when passed to a named beneficiary (person, trust, or institution), the IRA does not go through probate. However, at one's death, the funds can be highly taxed. In many instances, they can be depleted by more than 75%. If one's spouse is named as beneficiary in the IRA, he or she can create a "spousal roll-over IRA" and transfer the funds without paying any tax. The income is then taxable when he or she takes income. But, again, the death taxes can be substantial when the spouse dies.

Because of the high tax rate on IRA's at death, many individuals consider making a charitable gift to the College as the final beneficiary of their retirement plans. To name the College as final beneficiary to your retirement fund, you must request a "change of beneficiary" form from your depository. If you would like your spouse to be named the first beneficiary, the College would be named the contingent beneficiary for part or all of the account.

Life Insurance Gifts

Many people own life insurance policies that have outlived their original purpose. Perhaps the mortgage is paid, or the children have graduated and left the nest. This makes insurance an ideal vehicle for making a meaningful gift to the College, perhaps to name an endowed scholarship.

If the College is named as beneficiary of a policy, no income tax deduction is realized because the beneficiary designation can be changed by the owner at a later time. However, transferring the ownership of a cash value policy to the College will generate an income tax deduction roughly equal to the cash surrender value, as it is an irrevocable gift. Future premiums made by the donor will also be tax deductible, and the policy proceeds will not be included in the donor's estate.

There are three ways to make a gift of insurance to the College:

1. Donate a fully paid policy naming the RIC Foundation as owner and beneficiary
2. Donate a policy in which premiums are still owed and name the RIC Foundation as irrevocable owner. Payments made to RIC by the donors are then passed on to the insurance company, allowing the donor to take a tax deduction.
3. Purchase a new policy and name the RIC Foundation as irrevocable owner and beneficiary.