Pete and Paige Ashby found themselves at a crossroads in their careers as they reflected this year on how to give back to the causes that have meant the most to them.
“We have all had dear friends and family affected by cancer,” Pete said. “I have friends fighting it right now.”
The Ashbys knew they wanted to support the cancer research and care happening at VCU Massey Cancer Center.
“I can’t think of a single person we know who has not been affected by cancer in some way,” Paige said. “And it's important for us to know that we could potentially do something to help ease suffering or even help save a life in the future.”
Though they had never heard of it before, a friend had told them about the benefits of making a gift through a charitable trust, and they began to explore the option. The Ashbys decided a charitable remainder unitrust would work best for them.
“What struck me about this charitable remainder trust is how it’s really a reasonable way to mutually benefit the charities we care about and our family,” Pete said. “It actually sounded almost too good to be true.”
The couple transferred real estate into a charitable unitrust. In turn, they receive a charitable tax deduction, avoid that capital gains taxes that would have been due had they sold the property themselves, and receive income for life. When the trust terminates, its remainder will be used to support the causes they care about.
“At first we were going into the unknown,” Paige said. “We went from owning real estate to donating it, and we weren't sure exactly how well the charitable trust would work out for us. So far, it's been a win-win.”
Their request for the eventual proceeds from this gift is that the funds be used to advance cancer research at Massey. A portion will also support VCU Rice Rivers Center, a national leader in ecological and environmental research. As they see it, the ecological research happening is an important way to help future generations by protecting waterways from harmful pollutants that carry the risk for causing cancer.
“We couldn’t think of a better place to support with a donation than Massey,” Pete said. “We would love to see them continue to develop their research and do as much as they can to find new treatments and potentially end the suffering cancer causes many people.”
Gift Planning: How Charitable Trusts Work
Charitable trusts offer creative and flexible ways for individuals or couples to support the causes most meaningful to them. While they are similar in concept to charitable gift annuities, they can be more individualized and funded with a broader range of assets. In addition to cash and appreciated securities, donors can also fund charitable trusts with real estate or other appreciated property.
Donors receive an immediate charitable income tax deduction for a portion of any gift they make to the trust. Upon termination of the trust, the accumulated principal, or “remainder interest,” goes to the donor’s desired cause on the MCV Campus. The MCV Foundation does not serve as trustee of charitable remainder trusts, although we are happy to work with you and your advisor to establish this type of planned gift.
Which Trust May Be Right for You?
There are several types of trusts to consider.
Charitable Remainder Unitrust
Donors receive income for life and reduce their taxes while supporting the MCV Campus by transferring cash or assets to fund a charitable remainder unitrust. Not only does this approach pay variable income to the donor and others for life, but donors also receive a tax deduction when transferring assets to the trust. The remaining portion of the trust, after all payments have been made, provides support to the MCV Campus.
Charitable Remainder Annuity Trust
This trust works the same as the unitrust but provides fixed payments to the donor or others. Donors using this type of trust can count on receiving a predictable income stream that does not vary based on investment performance.
Flip Charitable Remainder Unitrust Trust
A flip unitrust can be an excellent way for donors to give an asset that may take time to sell and receive substantial payments for life once that asset is sold. Flip unitrusts are often funded with real estate or special collections. Flip unitrusts can also be used to make a gift now that will boost income later, such as when a donor retires.
Charitable Lead Trust
With this option, donors can transfer assets to their heirs or retain them for themselves, reduce or eliminate gift or estate taxes, and also create a legacy on the MCV Campus. Donors will receive a gift or estate tax deduction when they fund the trust. Annual payments are made to the MCV Campus for a period of time, after which the donor or others designated will receive the remaining assets, as well as any increase in value, free of any estate or gift taxes.
If you are interested in learning about how you can make a gift to the MCV Foundation via a charitable trust, please contact Ann Deppman, J.D., director of gift planning.