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Colorado University has made quite an impression on some people. Now, those people are coming back to leave their own impression on the university in the form of a multi-million dollar estate gift.

A husband and wife recently pledged the biggest gift ever received from an estate, $12 million, to the university. As longtime supporters, the couple said they’d like to see the university rival Princeton in terms of academic success and quality. The gift will go to fund scholarships, international initiatives and experimentation.

Estate gifts are just one way that people can pass their wealth to worthy causes and charities. This is often done when someone of means has more money accumulated than he or she wishes to leave to any heirs or when someone simply doesn’t have any close relatives around to inherit their assets. Rather than allow the state to have the benefit of all that wealth, an estate gift allows the benefactor to choose the recipient and make sure that something good comes from the donation.

Probably the most common way to pledge money to a school is through a trust. Assets placed in a trust are able to pass directly to the beneficiary on the death of the benefactor so that they avoid probate.

If the money is placed in a revocable living trust, the benefactor can always cancel the trust if plans change. The trust only becomes irrevocable once the benefactor dies. These are particularly useful when a trust goes to a charity or school that qualifies for a tax deduction, because the benefactor keeps the deduction while he or she is alive.

An irrevocable trust, on the other hand, can’t be broken. Money that’s placed in that kind of trust is transferred out of the benefactor’s control and is taxed independently, so the trust gets whatever tax deduction applies.

If you’re considering leaving money to your alma mater as part of your estate, talk over your options with a financial expert before you decide the best route to take. There may be options you haven’t yet considered!

Source: University of Colorado Denver, “Benefactors hold grand visions for CAP, CU Denver,” Chris Casey, April 19, 2018