Glossary of Common Terms

Common Terms

Bargain sale – a simple agreement in which real estate, tangible personal property, or other assets are sold to a charitable organization at less than fair market value. The difference between the sale price and the fair market value qualifies for a federal income tax deduction.

Beneficiary designation – giving technique that involves naming a person or entity as the recipient of an asset upon the death of the owner. See TOD below.

Bequest – a direction in a will or trust to distribute property or money.

Burnett Society – a University of Nebraska Foundation giving society for donors who have made a planned gift to benefit the university.

Charitable gift annuity – a contract issued by a charitable organization to pay a fixed dollar amount annually to one or two beneficiaries for life in exchange for an up-front contribution.

Charitable lead trust – an irrevocable trust that pays income to charity for a term of years and then distributes its remainder to one or more individuals.

Charitable remainder trust – an irrevocable trust that pays income to one or more individuals either for life or for a term of years and then distributes the remainder to one or more charitable organizations.

Disclosures – legal information about the University of Nebraska Foundation’s fees and operating policies. The legal disclosures are available at nufoundation.org/legal.

Donor advised fund – a giving vehicle established at a public charity that allows donors to make charitable contributions, receive an immediate tax deduction, then recommend grants from the fund over time. More information on the University of Nebraska Foundation’s DAF can be found here.

Endowment – gifted assets that are invested such that the principal is protected in perpetuity and only a percentage of the income is spent for the charitable purpose outlined by the donor.

Expendable – the entirety of the gifted assets are available for campus to spend according to the charitable purpose outlined by the donor.

Gift intention form – a form donor’s use to document their planned gift intentions, thus ensuring their plans can be met by the University of Nebraska Foundation and campus.

Grantor – the creator of a trust.

IRA – Individual retirement account.

IRA rollover – a financial planning technique that involves transferring assets from a traditional IRA to a ROTH IRA. A charitable gift is often used to offset the tax implications of such a transfer.

Living trust – an estate planning tool used to pass on property while generally avoiding costs and delays associated with probate.

Probate – the legal process of proving the validity of a will, used loosely to mean the administration of an estate.

Qualified charitable distribution – a charitable distribution from an individual retirement account that does not qualify for a charitable deduction, however, it does lower taxable income for donors age 70½ and older.

Retained life estate – a gift of property in which the donor retains the right to use the property for life.

Testamentary trust – a trust established through the will of a grantor.

TOD – transfer on death designation lets beneficiaries receive assets at the time of the owner’s death without the need for probate. Typically life insurance, checking and savings accounts, retirement accounts, etc.

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