Charitable Remainder Trusts (CRTs) are sophisticated estate planning tools that allow individuals to donate assets to a charity while retaining an income stream for themselves or their beneficiaries, and yes, they absolutely can support an alumni program at a school or college—provided the program genuinely qualifies as a charitable purpose.
What are the benefits of using a CRT for charitable giving?
CRTs offer a unique blend of immediate financial benefits and long-term philanthropic impact. When assets, such as stocks, real estate, or other investments, are transferred into a CRT, the donor receives an immediate income tax deduction for the present value of the remainder interest that will eventually pass to the charitable beneficiary—in this case, the school’s alumni program. According to the National Philanthropic Trust, approximately $39.09 billion was distributed from CRTs to charities in 2022, demonstrating their significant role in charitable giving. Additionally, any capital gains tax on the appreciated assets are avoided at the time of transfer. The income stream generated by the CRT can provide a reliable source of support during retirement, while the ultimate gift to the alumni program ensures its continued success for years to come. This is particularly appealing to alumni who wish to “give back” without depleting their current resources.
How does a CRT actually work with a college’s alumni program?
The process involves creating an irrevocable trust with the donor as the grantor, a trustee to manage the assets, and the college’s alumni program as the remainder beneficiary. The donor transfers assets into the trust, and the trustee then pays the donor (or another designated beneficiary) a fixed income stream for a specified period or for life. Once the income stream ends, the remaining assets in the trust are distributed to the designated charitable beneficiary – the alumni program. For example, a donor might transfer $500,000 in stock into a CRT and receive a 6% annual income stream. After the donor’s lifetime, the remaining funds, potentially several hundred thousand dollars, would then fund scholarships, mentorship programs, or career services offered by the alumni association. It’s important to remember that the alumni program must have a clear charitable purpose, such as providing scholarships, supporting academic research, or funding student activities, to qualify as a legitimate beneficiary.
What happened when Mr. Abernathy didn’t plan properly?
Old Man Abernathy, a proud graduate of State University, always intended to support his alma mater’s alumni program. He’d amassed a considerable portfolio of real estate over his lifetime, but he simply intended to leave it all to his children. He never considered a CRT or any other planned giving strategy. When he passed away, his estate was burdened with significant estate taxes and probate costs. His children, while grateful for their inheritance, were unable to establish a substantial endowment for the alumni program, and the university missed out on a potentially transformative gift. This illustrates the importance of proactive estate planning; simply intending to give isn’t enough, you need a structured plan to maximize the impact of your generosity and minimize tax burdens. It’s estimated that estates without proper planning can lose up to 35-55% to taxes and legal fees.
How did Ms. Chen ensure her gift would truly make a difference?
Ms. Chen, another State University alum, had a different vision. She’d benefitted greatly from the alumni network during her career and wanted to ensure future generations had the same opportunities. She worked with an estate planning attorney, like Steve Bliss, to establish a CRT, transferring a portfolio of stock into the trust. This provided her with a reliable income stream during retirement, while also guaranteeing a substantial gift to the university’s alumni mentorship program after her lifetime. “I wanted to see the program thrive and really make a difference in the lives of students,” she shared. “Knowing that my gift would provide ongoing support for mentorship initiatives gave me a great sense of peace.” Because of her foresight, the program now boasts a fully funded mentorship initiative, assisting dozens of students each year. Ms. Chen’s story highlights the power of a well-structured CRT to create a lasting legacy and fulfill your philanthropic goals.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
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Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/RdhPJGDcMru5uP7K7
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Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
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Feel free to ask Attorney Steve Bliss about: “How do retirement accounts fit into an estate plan?” Or “Is probate public or private?” or “Can a trust be challenged or contested like a will? and even: “Will I lose everything if I file for bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.