The Rust Trust

What wonderful things are happening at the University of Sioux Falls! In all my years as a trustee, I have never seen such dedicated and extremely qualified faculty, staff, administration, and, above all, such high-quality students.

When the concept of a new Professional Development Center/School of Business was conceived, we were excited to be able to be a part of this very important project. Therefore, we made a $100,000 first in the form of a charitable remainder unitrust. We were able to donate appreciated stock, thus avoiding the long-term capital gains tax while receiving a lifetime income as long as we live. A sizable income tax deduction of $39,413 was also appealing.

Education is vital to our young people. It is especially critical that these men and women be exposed to an education that offers a Christian background.

"The Lord has been good to us. This is one way to show our appreciation for all the blessings we have received during our 55 years of marriage."

What About the Kids?
Making sizable donations to charity needn't leave your loved ones high and dry. After years of running a successful business, Jane and Dan Phillips (fictitious names), both 65, find themselves in position to help others. They determine two major priorities: 1) to provide for their son; and 2) to make a significant gift to charity. As is true for many people the Philipses' most valuable assets, aside from their home, are highly appreciated marketable securities. Upon the advice for their professional estate planner, Jane and Dan decide to establish a charitable remainder trust. The Philipses fund the trust with $500,000 of appreciated stock that they have held for years. By donating the stock to a charitable trust, the Philipses avoid all capital gains tax on the stock's appreciation. The trust will pay the couple 5 percent of the fair market value of the trust assets as revalued each year in addition; they receive an immediate charitable contribution deduction on their income taxes of about $180,000. At their death, the remainder goes to the charitable organization or organizations of their choice, such as the University of Sioux Falls.

The Life Insurance Solution
The couple's next objective is to replace the inheritance their son would have received had they not been so charitably inclined. IN a 55 percent estate tax bracket, $500,000 passing to their son would be reduced to $225,000. While there are several ways to go about replacing the value of this girt—a professional advisor can explain a variety of alternatives—Jane and Dan's choice involved life insurance. They decided to give their son enough money to buy and hold a $225,000 insurance policy, which names him as beneficiary, on their lives.

(Bob and Betty Rust (of Park Rapids, Minnesota, and Naples, Florida) were able to play a significant role in the new Cleveland Professional Development Center and John T. Vucurevich School of Business building project through a first in the form of a charitable remainder unitrust.)