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Moscow Campus

Estate, Trust and Gift Planning
University of Idaho
875 Perimiter Drive MS 3201
Moscow, ID 83844-3201
(866) 671-7041
Types of Gifts

Charitable Remainder Trust

Charitable Remainder Trust

A Charitable Remainder Trust is also known as a CRT, and was created by the Tax Reform Act of 1969. It is an irrevocable trust allowing the donors to convert highly appreciated assets into a lifetime income stream for them, their spouse, or another family member, without generating estate and capital gains taxes. CRTs are most often created for lifetimes but can be for a term of up to 20 years or a combination of the two. The law stipulates the payout must be at least 5% of the value of the underlying trust assets, and the payout is usually in the 5-7% range, depending on the ages of the income recipients. When the trust ends, the remaining assets pass to the University of Idaho to support the programs specified by the donor.

Charitable Lead Trust

A Charitable Lead Trust (CLT) is often viewed as the opposite of a Charitable Remainder Trust. The trust pays a percentage of the value of the trust assets, usually for a term of years, to the University of Idaho. At the end of the term, the trust is terminated and the remaining assets are distributed to designated heirs. The gift tax is greatly discounted at the outset, and any growth in the trust is passed to the beneficiaries, gift and estate tax-free.

Charitable Gift Annuity

A Charitable Gift Annuity is a contract between the University of Idaho Foundation, Inc. and one or two individuals (most often a married couple). In exchange for a gift of cash or other property, the Foundation promises to make periodic payments to the donors (or other persons identified by them) for as long as they live. Part of each payment is taxable as ordinary income, but part is treated as return on principal and is tax-free. If the income recipients live beyond their actuarial life expectancy, all later annuity payments will be treated as ordinary income.

The payout rates for charitable gift annuities are established by a national association and adhered to by all reputable charities, including the University of Idaho. These rates can be very attractive, especially for people in their 70s and 80s or older. They are simple to establish and are backed by the full faith and credit of the University of Idaho Foundation, Inc., currently with assets over $200 million.