The Charitable Remainder Trust enables a person wishing to contribute to the future of Suffolk University to do so while retaining, and often, increasing current income. A donor makes an irrevocable transfer of property, cash or other assets, to a trust. The donor retains a right to receive income from the property in trust or designates another person or persons to receive the income.

The donor receives an income tax charitable deduction in the year of the gift. If the gift is made with appreciated, long-term property, the donor incurs no immediate capital gains tax on the transfer to and the subsequent sale of the assets by the trust. When the trust term ends, the property remaining in the trust becomes a gift to Suffolk University. There are two types of trusts:

Unitrust: Income fluctuates annually with the fair market value of the trust.

Annuity Trust: Income payments are fixed and determined when the gift is made.

Jonathan and June R.’s charitable remainder trust

Jonathan and June R. purchased a vacation home on the Cape in the early 1970s. They have many fond memories of summering there, but were planning to retire to another part of the country to be closer to their children. They had mixed feelings about leaving New England. Before the move, they wanted to leave something significant behind in the form of a gift to Suffolk, where they both had received their undergraduate degrees.

They decided to transfer their vacation home as a charitable remainder unitrust with Suffolk as the primary residual beneficiary. In exchange, they would receive annual payments of 5 percent of the trust principle, valued at $500,000 at the time of transfer. The gift of real estate appealed to the couple because it allowed them to convert one aspect of their personal history—their vacation home—to benefit another, Suffolk University.

By funding their charitable remainder unitrust with their vacation home, Jonathan and June have:

• Received an income tax deduction
• Avoided capital gains tax
• Earned $25,000 from the trust the first year
• Guaranteed a life income based on the  principle of the trust
• Reduced their estate tax
• Made a substantial gift to Suffolk University

Please contact the Office of Advancement to learn more about gifts of charitable remainder trusts.