James Arrison ’64 Gives Back with a Gift Annuity

James ArrisonWhen he was in high school, Captain James Arrison III '64, USN (Ret.), sat with his father to have a candid conversation about his future. He figured he'd follow in his dad's footsteps as a bank trust officer.

"He said absolutely not," Arrison recalled. "He didn't enjoy his job and couldn't recommend it. He said that of all the men he had known, naval officers seemed to enjoy their work the most."

The younger Arrison learned how to apply for an appointment to the Naval Academy, then discovered that, in addition to getting a great education, he would be required to play competitive sports. He was hooked.

Arrison excelled at the Academy. Today he and his wife Susan are doing their part to ensure the Academy remains an exceptional place for training future naval officers. Jim is a Trustee of the Naval Academy Foundation's Athletic & Scholarship Programs (A&SP) division, and he and Susan are members of the Robert Means Thompson Society and President's Circle donors whose contributions include a charitable gift annuity. Their son, James M. Arrison IV '92, also attended the Academy.

"Susan and I are impressed with how diverse and challenging the programs at the Academy have become and want to see that momentum continue," said Arrison. "We often hear that officer training can be done as effectively and with much less expense at civilian colleges. I disagree. The key difference is the leadership training at the Academy. It's taught in the classroom, but it's also integrated into a midshipman's daily life in Bancroft Hall and on the athletic fields."

Arrison had a chance to put his skills into practice soon after graduation. "As soon as I reported to my first destroyer, I found plenty of ways to use the teamwork and leadership skills that became second nature to me at the Academy. Susan and I together enjoyed the camaraderie and professionalism of our first wardroom so much that making the Navy a career came naturally."

After tours in a destroyer and swift boats in Vietnam, Arrison received his master's degree in operations research at the Naval Postgraduate School and had a 27-year career as a surface warfare officer. He retired in 1991 after returning from Operation Desert Storm as chief of staff of the Theodore Roosevelt Carrier Battle Group. He then started his second 20-plus year career with Merrill Lynch in financial management. There he became acquainted with planned giving vehicles while working with clients who held too much wealth in appreciated stocks—a situation he and Susan occasionally found themselves in.

"It can be difficult to keep a portfolio properly balanced when one or more holdings appreciate greatly," Arrison said. "Keeping the positions adds unwanted portfolio risks, while selling generates capital-gain tax."

The Arrisons worked with Foundation Planned Giving Director Patti Bender to rebalance their investment portfolio while supporting the Academy. "At our ages and with our children grown, we were able to transfer some of our appreciated stock to the Academy through a charitable gift annuity," said Arrison.

Bender explained that the income generated from a charitable gift annuity could be directed where the Arrisons wanted it to go. They use their annuity payments to cover Jim's A&SP Trustee dues, an amount that also makes them eligible for recognition in the President's Circle—the Foundation's leadership giving society.

"The Academy represents everything good that has happened in our lives," said Arrison. "We're honored to give back."

 
 

© 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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