Many wealthy people have hopes of leaving a legacy and using their money to do good things. While they donate to all sorts of different charities, many like to give money to their alma maters' endowment funds.
Over the years, so much has been given to the most prestigious schools in the nation, that those schools have been criticized for charging high tuition when they have millions of dollars in their endowments.
Interestingly, the GOP's tax plan would include new taxes on those endowments, as CNBC reports in "Wall Street college stars are surprise tax reform targets."
Under the proposal, university endowments would face a 1.4% tax on investment income. If the endowments have executives who are compensated more than $1 million a year, they would face a 20% excise tax.
Several wealthy endowments currently pay multiple executives more than $1 million a year.
If this proposal passes, it could mean that wealthy donors, in Cincinnati and elsewhere, will want to give to their alma maters in different ways. In addition, money given to the endowment funds will not go as far as it does now.
This proposal should be monitored for now.
After passage, if you want to change how you donate to a university, then visit your estate planning attorney.
Remember: “An ounce of prevention is worth a pound of cure.” When making your estate plans or when probating an estate or administering a trust, do not go it alone. Be sure to engage a Cincinnati estate planning attorney.
For more information about estate planning, probate or trust administration in Cincinnati (and throughout the rest of Southwest Ohio) and to review free resources regarding estate planning, probate or trust administration, visit my website. If you have questions regarding this article or a particular legal matter, feel free to contact me at 513-399-PLAN (7526).
Reference: CNBC (Nov. 3, 2017) "Wall Street college stars are surprise tax reform targets."