Goals for Giving

"Penn State has always been dear to our hearts," says Joyce '50 SCI and Charlie '51 LIB Mathues. "We met at Penn State, spent many happy years there, and have enjoyed our return visits to the campus. We both felt we had received a great education from our respective colleges. We decided early on to make Penn State a part of our will and to give back for all that we have received."
Over the years, the Mathueses accumulated real estate that had grown substantially in value. However, real estate, other than a primary residence, is subjected to capital gains tax. And then, of course, there is the cost of marketing and selling the real estate, which takes time and effort. But making a gift of real estate-either outright or as a remainder interest-can result in valuable income and estate tax deductions and capital gains tax is avoided. So, after retirement, they thought about using one of their properties to make a gift to Penn State. After talking with their lawyer and with staff from Penn State's Office of Planned Giving and Endowments, they decided to make a gift of real estate to the University to establish a charitable remainder unitrust.

It worked like this: They set up a trust and funded it with the piece of property. The trust then sold the property for cash, which was then invested to generate an interest income for life for the couple. At the death of the second spouse, the balance of the trust will go to the Eberly College of Science and the College of the Liberal Arts to fund scholarships in their names. They also decided to create a scholarship in memory of a special professor.

Additionally, they have the option of giving back some of the income interest derived from the charitable remainder unitrust, which can be used to start the scholarships during their lifetimes.

Real estate is just one of the many assets that can be used to fund charitable remainder unitrusts, but for Joyce and Charlie Mathues, it was the best asset to achieve their goals and help Penn State students achieve theirs.

A charitable bequest is one or two sentences in your will or living trust that leave to The Pennsylvania State University a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I give to The Pennsylvania State University, a nonprofit corporation currently located at c/o Office of Gift Planning, 212 The 103 Building, University Park, PA 16802, or its successor thereto, ______________* [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to Penn State or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to Penn State as a lump sum.

You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to Penn State as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and Penn State where you agree to make a gift to Penn State and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

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