New Tax Act Offers Increased
Financial Freedom for Samford Donors
recently enacted the most sweeping tax legislation in almost two
decades. How do these changes impact you now? What will they mean
to your future financial security?
The changes represent good news for both you and Samford University.
Changes in income, estate and gift taxes mean most Americans will
have increased freedom to spend for current living, save for future
security and support causes more in keeping with their own priorities.
For instance, income tax rates are due to decline steadily until
2006. Simultaneously, gifts to Samford continue to provide income
tax charitable deductions to individuals who qualify. In fact, 2001
might be a good time to plan a gift to Samford and receive maximum
income tax benefits. Likewise, greater discretionary income over
the next few years due to decreasing income tax rates could mean
more money for individuals as well as support of Samford.
primary reason for charitable giving has always been the desire
to help make this world a better place, whether you are helping
individuals or institutions, to give something back," said
J. Wray Pearce, CPA, senior partner of Pearce, Bevill, Leesbury
& Moore of Birmingham and chairman of the Samford Planned Giving
Advisory Board. "The tax benefits play a secondary role, and
that will remain true under the new law."
There are more benefits that should help both individuals and charitable
Both parents and grandparents will benefit from several new provisions
for saving for higher education expense. Child-care credits are
increased, and limited relief from the so-called “marriage penalty”
will be phased in. After providing broad-based relief for lower-income
Americans, the new law will gradually restore full benefits of exemptions
and deductions for all taxpayers, regardless of income level.
One of the more controversial changes is the gradual elimination
of the estate tax and then immediate reinstatement in 2011. Do the
new rules mean we can forego estate planning? Absolutely not. Periodic
estate planning checkups, which have always been wise, remain vitally
charitable gifts should still be considered in an estate plan,"
said Dale Splawn, CPA, of Mackle, Splawn, Tindall & McDonald
of Birmingham and a Samford trustee. "They provide a way to
convert appreciated assets to an income stream in a tax-efficient
Half of Americans currently subject to estate taxes will no longer
have that burden once the new law begins to phase in January 1,
2002. About 98 percent of Americans will not pay estate tax. That
should be good for Samford and every other charitable institution.
A recent survey showed that the more estates were taxed, the less
was left to charitable institutions in terms of percentage. Now,
the tax burden will be less, so that more money may be left to family
and causes such as Samford University.
Finally, Congress made it easier for retirement-plan beneficiaries.
Retirement plans continue to be
"tax-cursed assets," subject to combined taxes at death
of 50 percent or more. However, it is now easier to leave these
benefits to Samford and other assets to family, thereby engaging
in tax-wise financial planning.
The secret to taking advantage of this increased giving freedom
is education. The Office of Gift and Estate Planning at Samford
can be a helpful information resource. Contact the office
at (205) 726-2366, toll-free at 1-877-782-5867 or by E-mail to firstname.lastname@example.org.
about the office's new free E-mail service, which provides informative
professional updates on such issues as tax laws, Social Security,
Medicare and financial markets, along with stories and articles
about how charitable estate planning may help you reach your goals.
Samford's GiftLegacy Web site at www.samford.edu by choosing
"Alumni & Giving" and "Giving to Samford."
Samford will host a national satellite teleconference, "Maximum
Tax Savings in the Tax Reform Act of 2001," on October 11,