Gift It Twice Strategy

GIFTING THE SAME ASSET TWICE STRATEGY


Are you looking for a way to provide income for your family and still use the same asset to create your legacy at Emma Willard School? There’s a way and it can involve the most tax-hostile asset in your estate—your Retirement Plan!
 
This popular strategy involves naming a Charitable Remainder Trust (CRT) as the beneficiary of your Retirement Plan. Upon your death, your retirement plan assets are transferred to the CRT. You can choose to have the CRT pay income to a loved one(s) for life or for a number of years, not to exceed 20. At the end of the term of the CRT, the trustee distributes the balance to Emma Willard School.
 
THE BENEFITS:
• The full value of your retirement plan is available to provide income to your surviving spouse or other loved ones for their lives or for a period of time you determine, up to twenty years.
• A significant estate tax deduction is created from the charitable gift.
• You treat your children fairly and they see philanthropy in action.
• Your children learn how to be more responsible with money as their inheritance is transferred over time.
 
Example: Christine has a retirement account with assets of $2,000,000 and she has two children. She wants to leave a significant gift to Emma Willard School as part of her estate but doesn’t want to feel she disinherited her children. At the same time she is concerned that if they receive their inheritance in one lump sum, they may not have the discipline to conserve it. Her daughter’s marriage is unstable, and her son doesn’t manage money well.
 
Working with her financial planner, she creates a Charitable Remainder Trust (CRT) and names the CRT the beneficiary of her retirement account. She directs the CRT be set up for 20 years and the trustee annually distribute 5% collectively to her children ($50,000 each). Upon the expiration of the 20 years, the trustee is directed to remit the balance of the assets in the CRT to Emma Willard School to fund an Endowed Scholarship in Christine’s parents’ name.

Christine has achieved her goals: Her two children each receive $1,000,000 over the twenty-year period. Assuming annual investment returns of 5% over the life of the trust, Emma Willard receives $2,000,000 at the end of the twenty-year trust period.


The information presented on these web pages is not offered as legal or tax advice. You are urged to seek the advice of your tax advisor, attorney, and/or financial planner to make certain any gift you are considering fits well in your specific circumstances.


Need more information?

If you would like more information on how to incorporate Emma Willard School into your financial plans, please contact Jack Sise, Director of Gift Planning, at jsise@emmawillard.org or by phone at 518-833-1831.
285 Pawling Avenue, Troy, NY 12180 | P: 518.833.1300 F: 518.833.1815
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