Thanks to thoughtful planning, the Class of 1912’s Guy R. Fisher didn’t have to choose between taking care of his family and growing the future of his beloved medical school. A charitable remainder trust allowed him to do both — and do them well.
“Through a charitable remainder trust, a donor irrevocably makes a gift to the trust that’s then used to provide beneficiaries a payment stream for their lifetimes,” says Jane Garnet Brown, director of gift planning at the MCV Foundation. “Upon the death of the last beneficiary, the remainder of the trust goes to the charity of the donor ’s choosing. This type of trust is considered a life income plan where the donor and their spouse or other beneficiaries are paid for life — or for a term of years.” Brown says a variety of benefits make a charitable remainder trust appealing to donors.
Tax deduction: You will qualify for federal income tax deduction.
No immediate capital gain tax: If you fund the trust with a long-term appreciated asset (assets you have held for more than one year, like appreciated stock) and the trust sells it, there will be no immediate tax on the capital gain. If you were to sell such an asset yourself, you would owe tax on all the capital gain realized in the sale.
Reduced estate costs: Your estate may enjoy reduced probate costs and estate taxes.
Success of next generation: You will provide generous support to the medical school and its future students.
These trusts are flexible in that they can also be used to turn illiquid assets, such as an underused vacation home, jewelry, art or land, into an income stream, making this type of planned gift an ideal choice for donors who are interested in supplementing their income during retirement.
“It’s a great idea if you or a loved one needs extra income in retirement,” Brown says. “You may also continue making gifts to the trust over time. Any year you need a charitable deduction, you can make a gift to the trust, receive a charitable deduction for a portion of y our gift, and your trust payout will increase as well. In a year where you don’t need the trust payment, you can even gift the payment stream back to the trust or give it directly to the School of Medicine.”
Through a partnership with the SunTrust Foundation and Endowment Specialty Practice, the MCV Foundation offers services to invest and administer life income plans such as the charitable remainder trust for donors. “This is a more cost-effective way to establish a charitable remainder trust,” Brown says. “We will handle the establishment of the trust, the sale of trus t assets, the investment management, tax reporting and beneficiary distributions. Our partnership with SunTrust allows us to make this process quite easy for our donors.”
Would you like to learn more about how to use estate planning to your advantage? If you are already speaking with a representative from the School of Medicine about making a gift, please let them know you’ve seen this article and would like more information. To begin a conversation about a planned gift, please talk to a gift officer you know or call the MCV Foundation’s Jane Garnet Brown at (804) 828-4599. The MCV Foundation houses the medical school’s endowment funds and offers planned giving expertise to our alumni and donors.