Estate and Charitable

Planning for Physicians

Securing A Future for Your Family, UF’s College of Medicine

and UF Health.

As a physician, you’ve built your career around

compassion and care for others. Now it’s time

to take care of yourself and your loved ones

through the creation of an estate plan that

captures your wishes and builds your legacy in

perpetuity. We can help.

UF’s Office of Gift Planning staff has

considerable experience in helping people

create and document estate plans that are

strategically developed and thoughtfully

executed. We would consider it an honor to

assist you and offer the information in this

guide as a starting point.

2014 Taxable Income Brackets Structure

Tax Rate

Single Filer

Married/Joint Filer

Head of Household Filer

10% $0 – $9,075 $0 – $18,150 $0 – $12,950

15% $9,076 – $36,900 $18,151 – $73,800 $12,951 – $49,400

25% $36,901 – $89,350 $73,801 – $148,850 $49,401 – $127,550

28% $89,351 – $186,350 $148,851 – $226,850 $127,551 – $206,600

33% $186,351 – $405,100 $226,851 – $405,100 $206,601 – $405,100

35% $405,101 – 406,750 $405,101 – 457,600 $405,101 – $432,200

39.6% $406,751+ $457,601+ $432,201+

Tax Law Changes That Can Impact Your LegacyDue to the dramatic changes brought about by the American Taxpayer Relief Act of 2012, a review of your will and estate plan is more important than ever.

About 77% of American households will face higher federal income taxes in 2013 and beyond. In addition to the regular federal income tax imposed, a new 3.8% tax will be levied on investment income for individuals making more than $200,000 a year and couples making more than $250,000.Fewer estates will be impacted by the federal estate tax in the foreseeable future as the exemption for estate taxes in 2012 were set at 40% of the value above $5 million. The exemption is indexed for inflation per individual, and increased to $5,340,000 in 2014. Although there are never guarantees, setting the estate tax exemption permanently in 2012 at $5 million per individual ended over a decade of uncertainty about whether the exemption would fall back to a level of $1 million prior to the Bush tax cuts in 2001.

Estate Planning for PhysiciansFor many physicians, constructing a sound estate plan is usually third or fourth on the priority list of their financial obligations. However, estate and financial planning actually go hand-in-hand. When a physician creates and establishes a retirement plan, life insurance plan or simply analyzes their personal finances, they are indeed taking subtle steps toward starting their estate plan.

Build an Estate Planning Team Ȫ CPA A Certified Public Accountant

can provide much more than tax planning and return preparation services. By becoming familiar with your personal, professional and financial circumstances, your CPA can analyze your financial status to set priorities for your cash needs during employment, retirement and post-death years, suggest various income and estate tax planning techniques to further build and preserve your estate and make many of the calculations needed to design the specifics of your estate plan. After your death, a CPA can oversee tax planning and prepara-tion services, assist in valuing closely held stock, design the estate’s books and records, and prepare schedules for tax returns and accountings.

Ȫ Financial Advisor This function demystifies how to create and guarantee your personal and busi-ness income. Capital and income creation through insurance and other financial products will guarantee stability and maintain your family’s standard of living if you were to become injured or killed.

This advisor could be your key to structuring savings for retirement

and chosing the best products that guarantee funds for your estate settlement at the end of your life.

TIP: Looking for a financial advisor? The Certified Financial Planner Board of Standards governs these professionals. Its directory can be found at www.cfp.net.

Ȫ Attorney Educating the client on current estate and gift tax laws, drafting documents to implement a client’s wishes and serving as a counselor on legal matters that arise after an estate plan is in place are key facets of the attorney’s role. Working with CPAs and financial advisors, attorneys can make sure assets are transferred properly to trusts or other recipients in accor-dance with the client’s plan. Communication with other team members is another critical service to ensure everyone, including the physician’s practice/office, fulfills your wishes. Further, the attorney works with your bank trust officer to administer your estate and trust(s), and may represent trust(s) in court during the post-mortem administra-tion process.

TIP: Looking for local attorneys who specialize in estate planning? Check www.martindale.com.

Ȫ Trust Officer Commercial banks have years of practical experience in trust administration and estate settlement. Many times their trust officer is able to suggest a simpler, less costly way of implementing an estate plan. Trust officers have faced liquid estate issues where the bulk of the estate is in the interest of a physician’s practice. Also, this officer can identify a need for life insurance, key man or buy/sell insurance. There is typically no

charge or obligation for discussing your estate planning concerns with trust officers. Many times these officers can make a more desirable trustee and/or executor, as opposed to a family member, because banks have corporate life. Their trust department staff specialize in investment management, record-keeping and taxation, and have the knowledge of all the duties of a fiduciary.

Estate Planning: 21 Things You Can DoGetting Organized is Easier Than You ThinkOne of the largest gifts you can leave your survivors is an organized estate. The time you spend now will help your loved ones to cope later, and will ensure your wishes will be carried out. Here is a simplified checklist to help you get started. Depending on your situation, you might discover other items should be addressed, as well. It’s a good idea to discuss your plans with your loved ones and the executor of your will to avoid confusion and surprises. You will also want to consult with your legal, financial and tax advisers.

Estate Planning1. Make or update your will. Determine what happens to your money and

possessions, and who becomes the guardian of your minor children. Otherwise, state laws and courts can make those decisions for you.

2. Make a living will. Outline the medical procedures you want taken if you become too ill to state your wishes yourself.

3. Create durable powers of attorney. These allow you to appoint someone to make decisions on your behalf if you become incapacitated. There are two types: one to deal with your personal, legal and financial affairs, and another to deal with health-care decisions.

4. Create a letter of instruction. This document helps your survivors know what to do first, second and so on. For example, it can spell out funeral wishes, people to contact and where your will and other key papers can be found. It also can provide information about your financial accounts and activities.

5. Calculate your net worth, including life insurance proceeds. This figure will determine whether you need to take steps to minimize or eliminate the impact of federal and state estate taxes. A tax or financial adviser can help.

6. Establish a trust if appropriate. A trust is a legal entity that holds property designated by you for the benefit of you and your beneficiaries. For instance, you might need to do this if you name minor children as your life insurance beneficiaries (legally they are too young to receive proceeds directly).

7. Make arrangements to transfer business assets. Business owners can predetermine what will happen to assets through legal agreements and life insurance on business partners.

Insurance & Retirement Planning8. Buy or update your life insurance. Life insurance provides an immediate

source of cash that can be exempt from federal and state income tax, but in general, not estate taxes. Review your ownership, beneficiary and coverage amount every two or three years to make sure your policies still reflect your needs and wishes.

9. Consider buying health/medical insurance. There are three major types of coverage to protect and stretch your assets. Long-term care covers the cost of long-term healthcare in your home or at a long-term care facility. Major medical protects you against rising heathcare costs. Disability insurance helps protect your income if you no longer can work.

10. Review your pension plan’s survivor benefits. This is a common need for hospital, VA, state and federal employees.

11. Review your IRA, 401(k) and other retirement plans for beneficiary arrangements and benefits. Many individuals assume their will provides necessary information about the disposition of assets at death. But, the designated beneficiary forms filed with your retirement accounts and life insurance policies will take precedence over your will.

Organizing Financial Records

NOTE: If you store any of the following information electronically, make a list of all locations, including physical sites (laptop, home computer, cloud file-sharing account, external hard drive, etc.), usernames and passwords, folder and file names and which information is kept there.

12. Create a list of financial accounts. List branch names and addresses, account numbers and pertinent information about your investments, bank accounts, insurance policies (life, disability, homeowners, credit and life) and other financial matters.

13. List the location of valuable documents. Your list might include deeds, car titles, military records, birth and marriage certificates, divorce decrees and estate planning documents.

14. List your personal data. This can include your Social Security number, driver’s license number, VA claim number, your date of birth and the names and phone numbers of family members.

15. Make arrangements for access to your safe-deposit box. In many states, safe-deposit boxes are closed upon death and are not opened until probate. Make sure copies of your will and other important documents are available outside of your safe-deposit box.

16. List loan payments. This listing should include information about credit cards, mortgages and consumer, auto and personal loans.

17. List other income sources and government benefits. This includes pensions and Social Security. For information on military benefits, check with the VA or your nearest military installation’s casualty assistance office.

18. List the location of tax records. Include your CPA’s name and contact information.

Personal Planning19. Provide the location of confidential or valuable items you may have put away

for safekeeping to a trusted family member or friend.

20. Provide the location of spare keys and security codes to a family member or friend.

21. Provide easy access to important documents, such as your will and your durable powers of attorney. Keep signed, original copies in your attorney’s office, as well as a copy in a fireproof file at home. Also give a signed copy to your executor.

The purpose of any estate plan is to ensure your personal, financial and tax goals are protected and distributed according to your wishes.

In the absence of such a plan, the onus is given to a probate court to determine how your wealth will be distributed, and to whom.

Your UF LegacyThe Power of Charitable Giving: Assets You Can Give

Ȫ Cash: Maximize your charitable deduction and deliver immediate benefits to UF.

Ȫ Appreciated Securities: Receive one of the IRS’s most significant tax breaks for these gifts.

Ȫ Personal Property: Donate books, artwork or equipment and secure an income tax deduction.

Ȫ Real Estate: Make a gift through a transfer of residential, commercial or undeveloped real estate.

Ȫ Lifetime Gifts of Insurance: Transfer to UF a policy you no longer need.

Ȫ Business Interests: Give UF an interest in a closely held or family business.

Ȫ Partnership Interests: Support UF’s programs or people by transferring an interest in real estate or an oil-and-gas partnership.

Ȫ Retirement Plans: Donate the balance of your retirement plan, which may be worth more to UF than to your heirs.

You determine exactly how you want your gift to

be used at UF.

From disease research to graduate assistantships to department support, your

legacy is your choice.

Gift Strategies For Consideration

Life Income GiftsThese allow you or others to derive income and tax benefits from your asset, even after you commit your gift to UF. There are several gift plans, each of which offer special advantages. All of them, however, can be made at any time and share several benefits:

Ȫ They pay income to you or those you designate.

Ȫ You receive an immediate income tax deduction, as well as potential deduc-tions or eliminations of gift, estate and capital gains taxes.

Ȫ You avoid/reduce capital gains tax if the gift is appreciated property.

Ȫ You can designate how the remainder of the gift will be used.

Charitable Remainder Trust (Gifts of $50,000 and above)This provides you or those you select with annual income. The trust can be established for one or two lifetimes, or for a term of up to 20 years. Generally, the older and fewer the beneficiaries or the shorter the trust term, the greater your tax benefits.

Variations include a charitable remainder annuity trust that provides a fixed annual income or a standard charitable remainder unitrust that provides market-sensitive income, which varies annually based on the value of the trust assets.

Charitable Gift Annuity (Gifts of $25,000 and above)This is among the easiest and most popular methods. You make a gift to UF, and UF in turn promises to pay you an income for the remainder of your life at a fixed annual rate. After your death, UF receives the remainder of the annuity.

A variation, called the deferred charitable gift annuity, defers income payments for at least one year and until you are at least 65 years old. This allows you to supplement your future income on a tax-deferred basis. Minimum gift amount is $25,000.

BequestsThis allows you to make a gift to UF through your will or living trust, receive an estate tax deduction for the amount of the gift, and leave a lasting legacy in the area most important to you. Just include this wording in your will:

“ I give, devise and bequeath to the University of Florida Foundation, Inc., a not-for-profit corporation existing under the laws of the State of Florida and located in Gainesville, Florida, (dollars, property, securities, percent of my estate, etc.) to be used for (name of program or fund) at the University of Florida.”

For gifts to UF’s permanent endowment, please add: “This gift shall be added to the University of Florida’s permanent endowment.”

Retained Life EstateReceive a large tax deduction by donating a residence, while retaining the right to live there for life.

Charitable Lead TrustThis is an innovative way to pass appreciating assets on to your family and make gifts to UF in the interim. The charitable lead trust generates income for UF now, while reducing your tax costs for transferring assets to your heirs.

“ From both a financial and philanthropic standpoint, the charitable lead trust was the best decision for me. It enabled us to provide for our family’s future in a tax-wise manner, and provided much-needed support now for medical programs at the University of Florida.” — Dr. Steve Scott

Gift AgreementThis is a formal document between you and UF. It ensures that your expectations can be met over time, even if the original context of the gift were to change. The agreement can provide guidance to the UF Foundation on the purpose of the gift without having to outline minor details directly in your will or trust.

The UF Foundation (federal tax ID number 59-0974739) is a Florida nonprofit corporation exempted from federal income tax as a 50l(c)(3) publicly supported charity. The UF Foundation does not provide legal, tax or financial advice. When considering planning matters, seek the advice of your own legal, tax or financial professionals.

RecognitionUF wants to thank everyone who has made an estate provision for the university, or a planned or deferred gift commitment, regardless of the amount. Please let us know if you’ve planned such a gift. These gift commitments include:

Ȫ a bequest in a will or living trust

Ȫ designating UF the beneficiary of a retirement plan

Ȫ a charitable remainder trust

Ȫ a charitable gift annuity

Ȫ a gift of a life insurance policy

Ȫ a remainder interest gift of a home or farm

We are here to assist you.Estate planning deserves your full engagement and periodic monitoring. While it is easy to get bogged down by the scope of the process, we can help you approach it systematically and develop a comprehensive plan tailored to your needs and desires. Purposeful charitable planning can enhance your financial goals and the legacy you leave for your family, friends and UF’s researchers, students and teachers. We welcome your call.

ContactȪ Paul Caspersen, CFP®, MS

Office of Gift Planning P.O. Box 14425 Gainesville, FL 32604-2425 866-317-4143 giftplanning@uff.ufl.edu

Ȫ UF Health Office of Development & Alumni Affairs P.O. Box 100386 Gainesville, FL 32610 (352) 273-7986