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If you have built a sizable estate and it is time to think about how you will invest your assets as you move through retirement, creating a charitable remainder trust might be a great option.
This type of trust provides you or a loved one income each year for life or a period not exceeding 20 years. When the trust is dissolved, the remaining assets are used by the University to support students, research, or other mission-related activities of your choosing. Depending on its size, the trust could create an endowed fund adding to your legacy. These types of gifts may offer you tax benefits today.
There are two ways to receive payments from a charitable remainder trust—unitrust and annuity trust—and each has its own benefits:
A unitrust pays you a variable amount each year based on a fixed percentage of the fair market value of the trust assets. The value and the payment are calculated annually. (If the value of the trust increases, so do your payments. However, if the value decreases, so will your payments.) Additional funds may be added to the trust, creating additional tax deductions.
An annuity trust pays you the same dollar amount each year regardless of fluctuations in trust investments.
These types of trusts are typically funded with a gift of at least $100,000.
Contact us today to receive a personalized and confidential illustration to show how a charitable remainder trust would benefit your specific situation. Or use our online calculator to estimate your payments.
See which type of charitable trust best fits your estate plan with the complimentary guide Trusts: Choose From Two Ways to Donate.View My Guide
Gifts That Pay
Your payments depend on your age at the time of the donation. If you are younger than 60, we recommend that you learn more about your options and download this complimentary guide Deferred Gift Annuities: Plan Now, Benefit Later.View My Guide
An Example of How It Works
Susan, 75, wants to make a gift to the University of Pittsburgh but would also like more income in the future. Susan creates a charitable remainder unitrust with annual lifetime payments to her equal to 5% of the fair market value of the trust assets as revalued annually. She funds the trust with assets valued at $500,000.
Susan receives $25,000 the first year from the trust. Subsequent payment amounts vary each year depending on the annual valuations of the trust assets. She is eligible for a federal income tax charitable deduction of $300,540* in the year she creates and funds the trust. This deduction saves Susan $95,173 in her 32% tax bracket.
*Based on a 2.0% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.
- Contact us to talk about supporting the University of Pittsburgh by setting up a charitable remainder trust.
- Download the factsheet.
- Seek the advice of your financial or legal advisor.
- If you include the University of Pittsburgh in your plans, please use our legal name and federal tax ID.
Legal name: University of Pittsburgh of the Commonwealth System of Higher Education
Address: 4200 Fifth Avenue, Pittsburgh, PA 15260
Federal tax ID number: 25-0965591