Gifts by estate note

What Is an estate note?

• An estate note is an irrevocable pledge or debt against the donor's estate.
• This instrument binds the donor's estate to the extent not paid during the donor's lifetime.
• Estate notes may be pledged for either one or two lives. With a two-life estate note, the obligation is binding only on the estate of the person who lives longer.
• The University of Rochester recommends this option for persons 65 years of age or older.

Benefits of estate notes:

• You may make a charitable gift to the University of Rochester after your lifetime without revising your current will or estate plans.
• There is no obligation to transfer assets during the donor's lifetime. However, the estate note offers the flexibility to make payments against the note during one's life.
• Dollar amounts of estate notes count towards fundraising campaigns, while bequest intentions do not. If the University of Rochester is already in your will, an estate note may be signed for some portion of the bequest you expect to come to the University of Rochester.
• Charitable contributions from estate notes may be designated for specific purposes.
• The University of Rochester's estate note is a single page-document.

Tax considerations

• Signing an estate note does not qualify the donor for a charitable deduction.
• Payments against the obligation during a donor's lifetime will provide income-tax deductions in the year made (up to the full amounts permitted by the IRS tax code).
• Unpaid estate note balances will provide the estate with an estate-tax deduction. Any amount outstanding on the estate note is deducted from the gross estate before any taxes are applied.

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