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The Retirement Unitrust

Many donors use charitable remainder unitrusts as a way to supplement their income. The income from a unitrust is determined yearly based on the value of the trust assets. Therefore, a unitrust invested wisely should provide a growing stream of income as the value of the trust increases.

Longtime University of Tennessee benefactors, Lew and Mary Jo Dougherty, wanted to make a difference for the University of Tennessee at Martin and UT Knoxville. Since Lew had recently retired from his dental practice, the unitrust fit well into their overall financial plan. Their gift established endowment funds at UT Martin and at UT Knoxville in Men's and Women's Athletics, Libraries, and the Music Department.

Lew attended UT's Knoxville campus from 1948 through 1950 and received his degree in dentistry from UT Memphis in 1954. Mary Jo is a UT alumna, graduating in 1952 with a major in textiles and clothing. Both have been active volunteers on behalf of the university.

Lew was president of the UT National Alumni Association in 1982-83 and has served twice on the UT Development Council as well as the UTM Development Committee. He served as chairman of that committee as well as chairing UTM's alumni phase of the 21st Century Capital Campaign.

Mary Jo has served on the executive committee of the UTNAA Board of Governors, was chair of the association's Women's Council, and was president of the Benton County UTNAA alumni chapter. She is a member of the UT Alliance of Women Philanthropists. Both Lew and Mary Jo were named honorary University Scholars, and they jointly received the Knoxville Chancellor's Citation for Extraordinary Service to the university. It was the first time either of these awards had ever been given to a couple.

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A charitable bequest is one or two sentences in your will or living trust that leave to The University Of Tennessee a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I, [name], of [city, state, ZIP], give, devise and bequeath to The University Of Tennessee [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to UT or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate, or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the gift tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to UT as a lump sum.

You fund this trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to UT as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and UT where you agree to make a gift to UT and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

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