A donor may purchase an annuity contract or establish a trust with the USM Foundation. The net present value of anticipated future annuity payments is recorded as a liability on the USM Foundation’s records. The difference between the total amount received for the annuity or trust and this liability is the gift amount and should be receipted as such.
The annuities and trusts are revalued each year in accordance with generally accepted accounting principles and any change in value is booked as a change in value of split interest agreements. This revaluation does not change the original gift amount.
Upon death of the annuitant, the remaining value of the trust or annuity is transferred to the donor designated operating or endowment account identified when the trust or annuity was established. If the donor outlives the actuarial life used for the calculations, then the annuity payments will deplete the value of the trust and there would be little or no proceeds to be transferred upon death. Annuity payments that need to continue to be made after the value has been reduced to zero are covered from the USM Foundation’s reserve funds.
General Counsel coordinates the establishment of the annuity contract or trust and notifies the USM Foundation Client Relations Specialist when documents for establishing an annuity or trust are prepared and sent to the prospective donor.
General Counsel forwards the signed annuity contract, the annuity / trust information and the Gift Information Form to the Client Relations Specialist when the necessary paperwork has been completed.
The USM Foundation creates an account for each annuity contract or trust.
Payments due to the donor are disbursed via a USM Foundation check or via direct deposit on a scheduled monthly, annual, or quarterly basis depending on the terms of the contract. The USM Foundation Client Relations Specialist will coordinate the payment arrangements with the beneficiary and will have them complete a Direct Deposit Form if that is the payment option chosen.
The individual campus development offices are asked that any known changes to annuitants contact information (address, phone, e-mail) be immediately communicated to the Client Relations Specialist.
TAX FORMS
The USM Foundation Business Office submits the required SS-4 Form, the Application for Employer Identification Number, to the IRS for all trusts established.
1099 Tax Forms are prepared annually by the USM Foundation and sent to each annuitant.
Tax Returns for all Trusts administered by the USM Foundation are prepared for each donor by USM Foundation accountants. Costs for preparation of the tax forms are charged to the trust.