It seemed like Dr. Svendsen’s work with stem cells held out hope for treating and perhaps one day curing or possible preventing Parkinson’s disease, ALS and similar neural diseases and damage. We thought, 'If we’re donating to the UW already, why not direct some of it to this research that can really change lives for the better?'

Brenda McCroskey

FEATURED ARTICLE SEPTEMBER 2004

Place Trust in the University of Wisconsin-Madison

Want to dispose of an investment, but worry about the potential tax on the capital gain? One solution: Use the appreciated, long-term securities or real estate to fund a charitable remainder unitrust with the University of Wisconsin-Madison. You avoid the capital-gain tax, secure payments to yourself and/or a beneficiary for life, and receive a current income-tax charitable deduction. Eventually the remainder of the trust assets will pass to the University of Wisconsin-Madison.

Here's an example: Mr. and Mrs. D, both 70, own $100,000 worth of mutual fund shares, which they purchased a number of years ago for $20,000. This particular fund has emphasized growth, and the dividend yield is a modest 1%. They would like more money to spend during their retirement years but hesitate to sell their shares and reinvest for income because of the capital-gain tax they would pay. To achieve their objectives, they contribute the shares to a unitrust with the University of Wisconsin-Madison and select a 6% payout rate. The results:
  • Their distributions immediately increase from $1,000 to $6,000 per year and will grow over time if trust assets appreciate in value.
  • They receive a charitable deduction of $35,858 that, in their 33% bracket, translates into a net tax savings of $11,833.
  • They avoid a potential capital-gain tax of $12,000 (15% of $80,000). Thus, the total tax savings is $23,833, reducing the net cost of the gift to $76,167.

We Are Here to Help

We have attempted to highlight practical considerations regarding funding a charitable remainder unitrust. You may have specific questions not addressed here. Please feel free to click here and fill out the request form so we may address any questions you may have. It is our pleasure to work with you and your advisors to complete gifts of all types of assets to the University of Wisconsin-Madison.