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Gift and Estate Planning

You can give an asset to Salem State, and receive a lifetime income for yourself and any beneficiaries you name in addition to income tax and capital gains tax benefits. Charitable annuities and trusts can be used to make a gift to the Salem State College Foundation while still generating income for you and your spouse, your parents during their retirement, or a family friend, for example.

There are two types of planned gifts: annuities (which pay a fixed lifetime income) and trusts (which pay a variable lifetime income). In both cases you, as the donor, receive lifetime income for you and/or other beneficiaries, an income tax deduction and avoidance of capital gains tax. For more information, contact our giving officers to discuss your charitable estate intentions today.

Charitable Gift Annuity

A straightforward gift to Salem State College, the Foundation pays a fixed dollar amount each quarter for the lifetime(s) of the beneficiaries you name based on the age of the recipients. 

A Charitable Remainder Trust

A trust gift is more involved and works as follows: You contribute an amount of principal to a trust, the principal is then invested by the foundation and the trust pays an annual income (in quarterly installments) to you and any beneficiaries you name, typically for life. After the last of the beneficiaries passes away, the remaining principal in the trust passes to the Salem State College Foundation for a purpose in line with your interests. The financial benefits you and the other beneficiaries receive from this type of trust include:

Lifetime income that has the potential for growth: The annual income payment is a percentage of the trust principal (typically five percent, but higher rates are available in certain circumstances). Any investment gain beyond the annual income payment each year is added back to the trust principal. If the trust principal grows over time, the dollar amount of the annual income also grows. 

Income tax deduction: You receive an income tax deduction in the year the trust is established for a portion of the initial funding amount. That deduction can be carried forward for up to five (5) additional years under certain circumstances.

Capital gains tax avoidance: If the trust is funded with appreciated property such as securities or real estate, you avoid paying any capital gains tax on that appreciation. Many donors use charitable remainder trusts as a way to convert an asset that is undiversified and/or underperforming from the standpoint of income generation, into a higher stream of income. Converting that asset without using a charitable trust usually requires liquidating the asset and incurring capital gains tax. The trust is a way to convert the asset without having to pay capital gains tax.