Charitable Remainder Trust

A Giving Option for a Larger Donation

If you are interested in supporting the University of Maryland with a significant gift while creating an income stream for you or a loved one, consider a charitable remainder trust. This type of trust provides you or other named individuals income each year for life or a period of years. At the end of the trust term, the balance in the trust goes to Maryland to support the area(s) you designate.

This gift option may offer you several tax benefits as well as repurposing your assets into a steady stream of income which may be more beneficial than keeping them or selling them outright. 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.

An Example of How It Works

Woman hugging dogSusan, 75, wants to make a gift to Maryland but would also like more income in the future. Susan creates a charitable remainder unitrust with annual lifetime payments to her equal to 5% of the fair market value of the trust assets as revalued annually. She funds the trust with assets valued at $500,000.

Susan receives $25,000 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 $299,845* in the year she creates and funds the trust. This deduction saves Susan $95,950 in her 32% tax bracket.

*Based on a 1.2% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.

Next Steps

  1. Contact the Office of Gift Planning at giftplanning@umd.edu or 866.646.4UMD to talk about supporting Maryland by setting up a charitable remainder trust.
  2. Seek the advice of your financial or legal advisor.
  3. If you include Maryland in your plans, please use our legal name and federal tax ID.

Legal name: University of Maryland College Park Foundation
Address: 4603 Calvert Road, College Park, MD 20740
Federal tax ID number: 52-2197313

Additional Resources

Discover More

See which type of charitable trust best fits your estate plan with the FREE guide Trusts: Choose From Two Ways to Donate.

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