Charitable Remainder Trusts

Rebecca Armstrong“My gift both provides a source of financial security in retirement and the satisfaction of ‘paying it forward’ in gratitude for the positive impact that Princeton has had on my life.”

-- Rebecca Wilson Armstrong ’74

In a charitable remainder trust, a donor transfers assets to Princeton. The University, as trustee, then provides regular payments, based on a percentage of the trust’s principal, to the donor and/or others for life or a specified period. Later, Princeton receives what remains -- the “charitable remainder” -- of the trust assets. A charitable remainder annuity trust (CRAT) offers fixed payments based on initial trust value.  A charitable remainder unitrust (CRUT) offers payments that vary according to investment performance from year to year.

Past performance is no guarantee of future results, but chances are your payments will grow over time. Princeton's trusts have achieved an average growth rate of over 6.0% over the last 10 years (to December 2011).

A minimum gift of $50,000 is required to establish a charitable remainder trust at Princeton.

Benefits

  • Capital gains taxes on the sale of highly appreciated stock are reduced or eliminated.
  • Income tax deduction ranges from 30% to 70% of the gift amount (depending on the beneficiaries’ ages and the payout rate).
  • Assets are removed from the donor’s taxable estate, unless beneficiaries other than the donor and donor’s spouse are involved.
  • Lifetime payments can be double or triple the amount of dividends paid by the stock used to make the gift.
  • Gifts of real estate can eliminate management headaches and reduce tax liabilities.
  • Assets are managed by some of the same highly skilled investment professionals who handle Princeton’s endowment in a diversified portfolio of stocks and bonds.

The information presented on these web pages is not offered as legal or tax advice. You are urged to seek the advice of your tax advisor, attorney, and/or financial planner to make certain any gift you are considering fits well in your specific circumstances.