Solutions for Large Donations
The Advantages of a Charitable Remainder Trust
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If you have built a sizeable estate and also are looking for ways to receive reliable payments, consider a charitable remainder trust.
These types of gifts do offer you tax benefits and the option for income. There are two ways to receive payments and each has its own benefits:
The annuity trust pays you, each year, the same dollar amount you choose at the start. Your payments stay the same, regardless of fluctuations in trust investments.
The unitrust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. The amount of your payments is redetermined annually. If the value of the trust increases, so do your payments. If the value decreases, however, so will your payments.
Learn more by viewing our Charitable Remainder Trust fact sheet.
An Example From Penn State
Paul '09h and Eleanor Chadderton are helping prepare the leaders of tomorrow at Penn State through a charitable lead trust they created to support Penn State Shenango in 2010.
"As a father of two Penn State graduates, a business owner, and an active member of the community, I have seen firsthand the important role the University plays in our area," explains Mr. Chadderton, retired owner and president of Chadderton Trucking, Inc., in Sharon, Pennsylvania, and a member of the Penn State Shenango Advisory Board. "Kids need more education today than when I was young, and it's only getting harder for them to find the money to afford it. Eleanor and I are trying to do whatever we can to help."
The Chaddertons' charitable lead trust, created through a gift of $500,000, is providing a $20,000 annuity to Penn State Shenango for ten years. Although the trust's first distribution was only recently received by the campus, it has already provided $15,000 in scholarship support for students. The remaining $5,000 of this year's gift was used to partially fund an interdisciplinary spring break service trip in March, which sent fourteen students to Urubamba, Peru, to help indigenous families replace their kitchens' traditional open-pit fire with with clean-burning stoves and chimneys. Because the gift provides unrestricted support, it can be used at the discretion of the chancellor for the greatest needs of the campus each year.
The Chadderton's charitable lead trust will continue to create exceptional educational opportunities for students at the Shenango campus for the next ten years. At that time, the trust's remaining assets, including any appreciation, will be transferred to the couple's beneficiaries at a reduced tax cost.
Read the full story on the Chadderton's gift.
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- Contact Michael J. Degenhart at 888-800-9170 (toll free) or email@example.com to talk about supporting Penn State by setting up a charitable remainder trust.
- Seek the advice of your financial or legal advisor.
- If you include Penn State in your plans, please use our legal name and federal tax ID.
Legal Name: The Pennsylvania State University
Address: c/o Office of Gift Planning, 212 The 103 Building, University Park, PA 16802
Federal Tax ID Number: 24-6000-376
The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results. Annuities are subject to regulation by the State of California. Payments under this agreement, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.