we have learned from first-hand experience that the 

 tradition of voluntary giving is firmly implanted in the 

 people of this country and that it is one of the remarkable 

 characteristics that set this country apart from every 

 other country in the world. We are also consistently 

 improving the record, as evidenced by the fact that phil- 

 anthropic giving in 1985 was double what it was just 

 seven years ago." 



Just as Congress has not changed any of the inheri- 

 tance or estate tax laws that were part of the 1981 tax 

 overhaul, so, too, there are continuing benefits in "de- 

 ferred," or "planned," gifts. These include gifts of life in- 

 surance, real estate, and gifts that return an income to 

 the donor (life income trusts). Some methods of 

 Planned Giving are reviewed, following: 



Life Income Trusts 



Giving gifts that return a life income to the donor 

 take the form of trusts. Upon the death of the donor, or 

 last surviving beneficiary, the principal that made up the 

 trust is transferred to the Museum. All gifts of this "de- 

 ferred" nature are deposited into the Museum's general 

 endowment. 



Charitable life income trusts basically are of three 

 types: the Charitable Remainder Unitrust, the Charit- 

 able Remainder Annuity Trust, and the Field Museum 

 Pooled Income fund. 



These are attractive to a person who has a signifi- 

 cant amount of highly appreciated securities. They are 

 often of low yield, yet, the donor retains them simply 

 because the capital gains tax would make it almost pro- 

 hibitive to sell. In addition, the person probably wants 

 the income. 



Complete freedom from capital gains and, there- 

 fore, capital gains tax, coupled with usually higher 

 yields, make life income trusts attractive. The new tax 

 law continues to allow this "waiver" of recognition of 

 capital gains, even for those persons who must pay the 

 alternative minimum tax. This fact, too, makes life in- 

 come trusts attractive. 



The two major types of charitable remainder trusts 

 are the Charitable Remainder Annuity Trust and the 

 Charitable Remainder Unitrust. An annuity trust pays 

 the donor/beneficiary a fixed dollar amount quarterly; 

 the unitrust pays out quarterly a fixed percentage of the 

 fair market value of the trust, based on an annual evalua- 

 tion. By law, neither trust can pay out less than 5 per- 

 cent. The annuity trust is a fixed instrument, in that 

 principal cannot be added to it; the donor may add to the 

 10 principal of a unitrust at anytime. 



The Field Museum Pooled Income Fund pays to the 

 donor/beneficiary only the income of his share of the 

 fund. A person may participate with a minimum of 

 $10,000, and he may add to it in $1,000 increments at 

 any time. At the time of entering into the fund, the 

 value of the donor's transfer is translated into numbers of 

 "units" in the fund. Payments are made on a pro-rata 

 basis of the number of "units" in the fund in which the 

 donor has an interest. The Field Museum Pooled Income 

 Fund pays out monthly. 



In all such life income trusts, at the death of the 

 donor/beneficiary, what is left in the trust — the "remain- 

 der" — reverts to the Museum and its endowment fund. 

 On the death of the donor/beneficiary in the Pooled In- 

 come Fund, only the underlying principal representing 

 that donor's income interest reverts to the Museum; the 

 Pooled Income Fund continues to provide income for 

 the surviving participants in the Fund. 



Gift of Real Estate 



Still an attractive form of gift unaffected by the new 

 income tax law is a gift of real estate. A home, con- 

 dominium, farm, a building, a summer cottage — all are 

 ideal gift vehicles. 



If making an outright gift of real property, and that 

 property has appreciated in value, the donor does not 

 recognize any capital gains and, therefore, is not subject 

 to capital gains tax. 



An arrangement known as a "life estate agreement" 

 can be made whereby the donor gives the property, but 

 remains living there rent-free for life, maintains it and 

 pays taxes, and enjoys any income it provides. In such an 

 agreement, the donor does recognize a portion of the 

 capital gain in the property to which he may be subject 

 to capital gains tax. 



Gifts of Life Insurance 



While life insurance policies do not have to go through 

 the probate process, they are counted in a decedent's 

 gross estate for federal estate tax purposes. For this rea- 

 son, some persons find it advantageous to give the 

 Museum life insurance policies. Each donor, in giving 

 gifts other than cash or securities, should seek advice 

 from his attorney or accountant. 



While Field Museum is endeavoring to increase its 

 endowment through "deferred" gifts such as life income 

 trusts and bequests, the Museum annually must raise 

 from $2-$3 million in contributions to the operating 

 fund to avoid deficits. Any gift, therefore, of any size, is 

 always gratefully appreciated. FM 



