Benefiting Academy and Donors Alike: Charitable Remainder Trusts

Bill MooreWhen Bill Moore ’61 arrived in Annapolis as a plebe in 1957, he fulfilled a long-standing family dream. His father had been admitted to the Academy but was unable to attend because in those Depression years he needed to work to help support his family. Moore made the most of his four years as a midshipman, serving as captain of the tennis team and earning a degree in engineering/naval science. He went on to serve four years on active duty, two on an aircraft carrier and two more back at the Academy as plebe and assistant varsity tennis coach.

Those experiences and an MBA from the University of North Carolina helped set the foundation for an exceptional career in banking and investment management, during which Moore held a series of positions with Legg Mason and founded an investment banking firm that he later sold to KeyCorp. As his career advanced, Moore looked for opportunities to give back to the Academy for its role in his success, making significant contributions to the Brigade Sports Complex construction and tennis programs and serving on the Naval Academy Foundation Joint Investment Committee and as an Athletic and Scholarship Programs trustee.

Along the way, Moore and his wife, Sandra, discovered an ideal way to combine their own financial goals with their desire to support the Academy: a charitable remainder unitrust (CRUT). Through his Naval Academy Foundation CRUT, Moore set up a trust and transferred to it a number of appreciated investments. Moore and his wife are paid a percentage of the value of the trust. After he and Sandra pass away, the remainder of the trust transfers to the Foundation. The Moores’ adult son and daughter are very supportive of their parents’ philanthropic plans — they understand the important role the Academy continues to play in their parents’ lives. While Moore acts as trustee for his CRUT, managing the investments himself, the Foundation fills this role for many CRUTs established by planned giving donors.

“From new and improved facilities such as the Brigade Sports Complex and Navy-Marine Corps Memorial Stadium to innovative programs like the Stockdale Center for Ethical Leadership Development, we see the tangible results of private support every time we return to Annapolis,” said Moore. “It is truly heartwarming to see that our current gifts and our future gift through our charitable trust are helping to sustain the highest level of excellence at the Naval Academy.”

Charitable remainder trusts offer donors several significant advantages:

  • Income for life or a term of years for the donor and/or spouse or other beneficiaries
  • Potential for growth of income over time
  • Investment diversification
  • No capital-gain tax due when assets are sold in the trust, making the full amount of the gift available for investment
  • Immediate income-tax charitable deduction for a portion of the gift
  • Potential gift- and estate-tax savings
  • Investment management services provided by the Naval Academy Foundation
  • Significant support for the Naval Academy mission and strategic priorities

“To me, the most important benefit of our giving to the Naval Academy is the knowledge that our gifts will help ensure the Academy’s ability to serve its mission and realize its objectives long into the future,” said Moore. “There are also a wealth of income benefits and potential tax savings available through properly structured financial gifts. But alumni and other donors don’t have to go it alone. The professionals in the Foundation’s planned giving office are there to work with you and can help you find the right vehicle for achieving your financial goals and supporting the Academy. Through working with the Foundation, alumni and friends of all different financial means can usually make far more significant financial gifts than they realize.”

For more information, contact Patti Bender at 410-295-4186 or plannedgiving@usna.com.

 
 

© United States Naval Academy Alumni Association & Foundation

 
 
 

A charitable bequest is one or two sentences in your will or living trust that leave to the United States Naval Academy Foundation a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I give to the United States Naval Academy Foundation, a nonprofit corporation currently located at 247 King George Street, Annapolis, Maryland 21402, or its successor thereto, ______________* [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to the Naval Academy Foundation or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to the Naval Academy Foundation as a lump sum.

You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to the Naval Academy Foundation as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and the Naval Academy Foundation where you agree to make a gift to the Naval Academy Foundation and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

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