Charitable Remainder Trust Offers Many Benefits and Options
Attorney and Ball State benefactor J. Richard Emens wanted options.
Seeking a way to supplement his family scholarship, the Emens Scholars program, he also wanted to create a safety net for himself and his wife, Beatrice, for their retirement years. A charitable remainder trust was the answer.
A charitable remainder trust is a custom-designed and individually managed trust that enables you to retain an income for your lifetime or a fixed term of years, claim a current income tax deduction, and make a future gift to Ball State.
Emens, a partner with Emens & Wolper Law Firm, Columbus, Ohio, says he was attracted to the numerous benefits this planned gift offers and the ease in setting up the gift agreement through the Ball State University Foundation. He has elected to contribute the annual income normally received by the beneficiaries back into the trust to increase the fund and generate a greater ultimate remainder for the Emens Scholars program after he and his wife pass.
"Adding funds to the trust, which will eventually go to the scholarship, is my way of paying tribute to my parents who contributed 46 combined years of service to the university," says Emens, who is chairman of the Ball State University Foundation Board of Directors.
Emens' father, John Emens, served as president of Ball State from 1945 to 1968, a period when the campus grew phenomenally and the institution's name was appropriately changed from Ball State Teachers College to Ball State University. The Emens Scholars program recognizes outstanding student leaders and encourages recipients to continue to develop their leadership skills at Ball State.
With retirement on the horizon, Emens said he likes the flexibility a charitable remainder trust offers. "Our charitable remainder trust provides a way to give back - with options," he says. "We can reinvest the income to increase the principal or we can choose to keep it. When we retire, the income will be there if we need it."
Charitable Remainder Trust - Benefits for You
You may want to make a significant gift to the Ball State but not give up the income that cash, securities, real property, or other assets produce. A charitable remainder trust is a life income arrangement that can solve this problem and provide the following benefits:
- Lifetime (or a term of years) income for you and/or loved ones designated by you.
- Income will increase as the market value of your trust principal may increase in future years, acting as a hedge against inflation.
- Professional investment management at low cost if the Ball State University Foundation Foundation is named trustee.
- Personalized investment portfolio.
- Current income tax charitable deduction for a significant portion of your gift.
- Avoidance of capital gains tax.
- Reduction of estate and gift taxes.
- Provide unrestricted support to the university, assist your favorite program, or establish a scholarship or perpetual fund with grants or the remainder of your charitable remainder trust.
- Memorialize your achievements or values with a permanent endowment fund with the trust's remainder.
- Recognize loved ones or mentors by naming a perpetual fund in their honor with the trust's remainder.
How it works:
Establishing a charitable remainder trust is easily accomplished by:
- Contacting foundation staff for an illustration of how the trust works as well as the available income payments and all potential tax benefits.
- Your counsel creates a trust document that is drafted according to IRS rules. Foundation staff can provide sample trust documents.
- The foundation may serve as trustee at reduced cost.
- You donate cash, stocks, real estate, or other assets directly to the trust.
- Payments (5 percent or more of the value of the trust) are made to one or more beneficiaries for life, or for a term of years, or both. Income payments are taxed.
- A separate agreement with the foundation is executed to define the eventual use of the remainder of your trust. Please contact the foundation staff for a sample agreement.