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My Perpetual Scholarship Fund

By James Fletcher BN '69

In addition to providing for family members and making donations to churches and other philanthropic institutions I admire, my desire was to establish a perpetual scholarship fund to benefit Drake students majoring in finance and real estate who are working their way through college.

I did not have the funds to attend Drake University after graduation from high school, so I joined the Air Force and completed my first year of college at Ohio University and the University of Maryland while stationed at nearby bases. After four years of service in the military, I attended Drake full time. Other than part-time jobs during school terms and summer jobs, the GI Bill was my only support.

I feel very indebted to Drake for giving me a great education in business fundamentals. Throughout my 40-year career as a commercial real estate broker, the courses in accounting, finance, statistics, business law and marketing were tremendously helpful in my success and establishing the groundwork for further education in my chosen field.

My goal in establishing the scholarship fund was twofold-to avoid estate taxes and pass on those funds for the benefit of students who need help to achieve their educational goals in the College of Business. In order to accomplish this, I have set up a revocable living will and trust that will fund a charitable remainder trust when I am gone. Drake's planned giving director and staff were of significant help in working with my estate planning attorney and providing me with information to achieve this end.

I sincerely hope other Drake graduates look into the benefits of charitable remainder trusts to help future Drake students, as well as explore the tax benefits that accrue to the balance of one's estate. I have the assurance that my estate funds will achieve the maximum benefit to society, and I believe it will inspire the students who benefit from the scholarship to do the same.

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A charitable bequest is one or two sentences in your will or living trust that leave to Drake University a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I give to Drake University, a nonprofit corporation currently located at 2507 University Ave., Des Moines, IA 50311, or its successor thereto, ______________* [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to Drake or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate, or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the gift tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to Drake as a lump sum.

You fund this trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to Drake as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and Drake where you agree to make a gift to Drake and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

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