In January 1999, Dr. Donald Smith established two charitable remainder unitrusts with the FSU Foundation. He continues to add to these trusts whenever he is able. In addition to receiving income from these trusts for life, Dr. Smith is entitled to a charitable income tax deduction every time he makes a cash addition to one of these trusts. The remaining principal in each of these unitrusts at the time of his passing will be used to establish The Sarah May Cummings and Ann Clemons Memorial Scholarship Fund for students studying history at FSU.
Dr. Smith has been kind enough to share a few of the reasons he supports FSU. He has also given us insight into why he chose to use a charitable remainder trust as his primary vehicle for giving. We have asked him questions that many people ask us about our donors, and have printed his responses with his permission.
Q. Why give so generously to Florida State University?
A. I never thought of it as overly generous. I am certain there have been many others that have given more. Are you familiar with what Andrew Carnegie said about wealthy people? "The man that dies rich dies shamed." I agree with that, and I don't believe in leaving sums to children. I believe in providing them with a good secondary school education and matching any amount they earn with money they can spend on an undergraduate education. I believe that graduate school should be something the student subsidizes from his or her own funds. My goal is to take whatever I have and leave it to a place like FSU in a manner that may do good.
I tried to set up a scholarship fund in 1993 after I had started playing with the stock market. At the start, I thought I might be able, over the years, to accumulate about $50,000 in the trusts. The trusts would then be used to set up a scholarship fund that would only be able to provide assistance to students every few years. Never in my wildest dreams did I think that I would be leaving as much as is currently in my trusts. If I died tomorrow, there would be about $300,000 to $400,000 available to endow the fund described above. Surely there will be enough income earned to enable deserving students to receive meaningful assistance every single year—in perpetuity.
Q. What area(s) of the University have you chosen to support and why?
A. I chose the History Department because I was an undergraduate history major, and the subject was always my favorite—it still is, but a doctorate in history isn't that good in the job market. I have often wondered how our involvement in Vietnam would have been different if more people had specific knowledge of Vietnamese history. It might have really changed things. That is why I left my money to be used to provide financial assistance to history students.
Q. What made you choose the charitable remainder trust as a vehicle for making a deferred gift?
A. It seemed to be an ideal way to set things up. Once opened, the donor can add to it with no restrictions as to when or how much. It also generates a tax deduction. And, although I did not have this option at the time, it will allow me to distribute the income from the trust to another person when I die. That distribution will continue until he or she dies, at which time the funds will go to the scholarship funds.
Q. We know that you make additions to your unitrusts almost every year. What made you decide to do so?
A. Of late, I have been making contributions every second year. The reason is simple: income tax. I have no debt and no deductions. So, I use the standard deduction in the years when I don't make a contribution. Forty thousand dollars seems to be an optimal figure for tax deduction purposes, and now I may be able to make such a contribution for two out of every three years.
Q. What advice would you give to other donors who are considering some type of deferred gift to FSU?
A. It would depend on what use they wished to have their contribution put to. If it was a scholarship fund, then I don't think that what I did could be beat. If the contributions are to be used for unspecified things, then I would still recommend the charitable remainder trust.
As Dr. Smith's story demonstrates, a charitable remainder trust can be a flexible tool for making a gift to FSU while retaining some income for you and/or your spouse. If you would like to discuss the benefit of establishing a charitable remainder trust with FSU, please contact us at (850) 644-0753. We look forward to hearing from you!
The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results. Annuities are subject to regulation by the State of California. Payments under this agreement, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.