2026 is an important date to plan for now. The federal government is set to roll back the amount you can leave to your heirs. Currently, the maximum an individual may leave to their heirs is $13.61 million. At the end of 2025, that number is set to revert back to $5.6 million and be indexed for inflation. It’s impossible to predict what Congress will do between now and then; however, using philanthropy as part of an estate plan can provide benefits.
A planned gift may provide opportunities to minimize taxes. Some options include:
- Charitable Remainder Trust: This is a trust that pays a fixed or variable income to you for life or for a term of years. It comes with a charitable income tax deduction and can help you avoid immediate capital gains taxes if funded with appreciated assets. A testamentary Charitable Remainder Trust is often used for retirement assets to avoid the possibility of double taxation (income and estate taxes) and to extend the time your heirs can stretch the payment out. The assets remaining help you create a legacy at Auburn.
- Retirement Asset Gift: This is a gift made by naming the Auburn University Foundation as a beneficiary of your retirement plan assets, such as an IRA, 401(k), 403(b), or another type of plan. This type of planned gift may provide significant reductions in estate and income taxes for your family. The Auburn University Foundation receives the amount tax free, whereas your heirs would be subject to income and possibly estate taxes.
- Retained Life Estate: This gift type provides a significant current income tax deduction without a current cost to you. You continue living in your house or farm while allowing easy, immediate, and direct transfer of your property to the Auburn University Real Estate Foundation after your lifetime.
Incorporating planned giving into an estate plan can be a win-win strategy. It can help you create your legacy at Auburn while also providing tax advantages.
You can work hand-in-hand with your financial advisors, estate planning attorneys, and Auburn’s Office of Gift Planning to develop a comprehensive plan tailored to your specific situation. By doing so, you can ensure your legacy of generosity and financial prudence benefits both Auburn University and your loved ones.
For more information about making a planned gift, contact plannedgiving@auburn.edu or 334-844-7375.
