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Charitable Remainder Trusts

MSULooking for a way to give Montana State University a significant gift? If you have built up a sizeable estate and are also looking for ways to receive reliable payments, you may want to check out the advantages of setting up a charitable remainder trust.

Benefits of a charitable remainder trust include:

  • A partial charitable income tax deduction
  • Potential for increased income
  • Up-front capital gains tax avoidance

There are two ways to receive payments with charitable remainder trusts:

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.

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A possible scenario

Susan, 60, wants to make a gift to Montana State University but would also like more income in the future. Susan creates a charitable remainder unitrust with annual lifetime payments to her equal to 6 percent of the fair market value of the trust assets as revalued annually. She funds the trust with assets valued at $250,000.

Susan receives $15,000 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 $81,305* in the year she creates and funds the trust. This deduction saves Susan $22,765 in her 28 percent tax bracket.

*Based on annual payments and a 2.4 percent charitable midterm federal rate. Deductions vary based on income earned.

How to Fund It

You can use the following assets to fund a charitable remainder trust:

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Next Steps

  1. Contact Samantha Beebout at 406-994-7099 or samantha.beebout@msuaf.org to talk about supporting the Montana State University Alumni Foundation by setting up a charitable remainder trust.
  2. Seek the advice of your financial or legal advisor.
  3. If you include Montana State University in your plans, please use our legal name and federal tax ID.

Legal Name: Montana State University Foundation, Inc.
Address: 1501 South 11th Avenue, Bozeman, MT 57915
Federal Tax ID Number: 81-6001649