Global Health Nexus, Summer 2001
The Magic of Planned Giving
Dr. Samuel W. Askinas, ’49, Increases Personal Income And Support For NYU Dentistry With A Charitable Remainder Trust
Last year Dr. Samuel W. Askinas, Class of 1949, decided that he wanted to increase his income by selling a
portion of his stock and reinvesting the proceeds. But he didn’t want to lose a substantial portion of his investment to capital gains taxes, and he was interested in a mechanism that would benefit NYU Dentistry also. His financial advisor suggested a charitable remainder trust, an arrangement that allowed him to transfer selected assets to a trust that will pay a fixed rate of income to him and his wife for the rest of their lives, after which NYU Dentistry will receive a portion of the assets remaining in the trust. When Dr. Askinas set up his trust, he received a substantial immediate income tax charitable deduction. And when the trust sold the stock there were no
capital gains taxes, so the entire value of his assets was available within the trust to earn income for him.
“I have always had extremely warm feelings about NYU Dentistry and I have supported the College for many years,” said Dr. Askinas. “I received an excellent education and I believe that the College is one of the great dental
institutions of the world. So when I started to think about estate planning, I reflected on how much NYU Dentistry had enriched my life and I selected a meaningful way to connect with the College’s future. The charitable remainder trust is an attractive gift arrangement; it gives my wife and me significant tax and income advantages, while it also made it possible for us to increase our gift to NYU Dentistry.”
A former executive dean and professor of restorative dentistry at Tufts University School of Dental Medicine, and a retired U.S. Air Force colonel, Dr. Askinas currently chairs the department of prosthodontics at the Nova Southeastern University School of Dental Medicine.
Can a Charitable Remainder Trust work for you?
Let’s assume that George and Amy, ages 77 and 74, want to increase their income from their stock holdings worth $250,000. The cost basis of the stock is $50,000. They want an income of 7.3%, or $18,250 annually. The alternative is simply to sell the stock and reinvest in bonds paying 5.5% annually. The following chart compares the two results.
|Remainder Trust |
|Sell and Reinvest |
|Capital Gains Tax (20%)||-0-||$40,000|
|Net for Investment||$250,000||$210,000|
|Income Tax Savings||$32,040||-0-|
|After Tax Cost||$217,960||$250,000|