A trust is an arrangement whereby property (including real, tangible and intangible) is managed by one person (or persons, or organizations) for the benefit of another. The two most common types of charitable trusts that you may want to consider establishing to benefit New York Medical College are charitable remainder trusts and charitable lead trusts.
Charitable Remainder Trusts
A charitable remainder trust is a type of life income agreement fund that combines charitable giving with other financial goals, including lifetime or long-term income with a payout rate of 5% to 7% and capital appreciation.
You can establish a charitable remainder trust with an irrevocable gift to New York Medical College of $100,000 or more. Your gift may be funded with cash, stocks, bonds, or real estate. The trust will then pay you either a fixed amount (annuity trust) or a percentage of the trust income (unitrust).
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.
Upon the death of the trust’s beneficiaries, New York Medical College will use the remainder of its funds for the purpose(s) designated when it was created. We will work with you and/or your advisors to ensure that your gift benefits an area of the College that is important to you.
Advantages of a Charitable Remainder Trust
- You will receive income for life or for a specified term of years.
- You will be able to take an immediate income tax charitable deduction when you make the gift.
- If you make your gift with appreciated securities, you may avoid immediate capital gains taxes.
- If you make your gift with low-yielding securities, you may actually increase your current income.
- Part of your income may be tax-free.
- You may reduce your estate tax.
- You will have the satisfaction of supporting New York Medical College.
- You will become an honored member of the Legacy Society.
Charitable Lead Trusts
Charitable lead trusts are often viewed as the opposite of a charitable remainder trust. With this kind of trust, you transfer property to the lead trust, which pays a percentage of the value of the trust assets, usually for a term of years, to the College. At the end of the trust term, the remaining assets in the trust and any growth it has realized are passed to your heirs. Although there is no income tax deduction when you create a charitable lead trust, your gift or estate tax is greatly discounted and any growth is passed to your heirs gift and estate tax free. It is one of the only transfer devices currently used that can discount the value of the original assets and result in little or no taxes. At the same time, you fulfill your charitable desires.
Advantages of a Charitable Lead Trust
- Gift and estate tax deduction on the value of assets is transferred
- Growth is transferred tax-free
- Management of assets is transferred
- Perpetuates a tradition of charitable giving
For more information, please contact the Office of Development & Alumni Relations at firstname.lastname@example.org or call (914) 594-4550.
Note: This page is intended to provide you with general information, not legal or tax advice about specific situations or problems. We strongly encourage you to consult a lawyer or accountant on all legal or tax matters.