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A win-win solution
Planning for retirement with a gift for the future
In the course of her volunteer service for Stanford Law School, Kathleen "Kathy" Borrero Bloch, JD '81, has seen its leaders navigate a range of complex issues, including shifts in the legal profession and the impact of the Great Recession.
"I've stayed close to the law school," says Kathy, who served as chair of the school's Board of Visitors and co-chair of several class reunions. "Stanford opened so many doors for me in my career, and I wanted to give back."
As Kathy and her husband, Dennis Bloch, started preparing for retirement, they thought about the law school's future, too. Knowing how the school's needs change over time, they decided to make an unrestricted future gift to the law school, which the dean can use to meet the school's top priorities. The gift also had significant benefits for the Blochs' financial planning.
Kathy was retiring following a career as general counsel at Echelon Corporation and, previously, as a partner at Wilson Sonsini Goodrich & Rosati in Palo Alto. Dennis was still active in his banking career. They were interested in using appreciated securities to fund a charitable gift that will benefit the law school in the future.
After working with Stanford's Office of Planned Giving to explore their options, the Blochs decided to establish a charitable remainder unitrust—a type of life income gift that will provide them with annual payments for the remainder of their lives.
"If we were going to make a substantial gift, we wanted to do it while our earnings were still high," Dennis explains. "Our tax situation played into the timing of our decision. By making a gift of appreciated securities and creating a charitable remainder unitrust, we maximized our contributions and reduced our tax obligations."
A charitable remainder trust offers several benefits, including the availability of a charitable income tax deduction when the trust is funded. In addition, a charitable remainder unitrust is tax exempt, so it does not pay tax on capital gains realized when the trust sells assets. As a result, the full value of the assets given to the trust can be reinvested to provide an annual income to the trust's beneficiaries.
Long-term confidence in Stanford was a key consideration for the Blochs when they established their charitable remainder unitrust. "There are lots of different ways to set up a trust," Dennis says. "We were able to work with Stanford to tailor the trust to meet our specific goals."
Dennis and Kathy are pleased to know that after their lifetimes, the remaining funds from their trust will benefit the law school.
"Twenty to 30 years from now, when the school receives the gift, the dean can decide how to best use it," Kathy says. "I don't know what the greatest needs of the school will be then."
The Blochs appreciated the opportunity to work with the staff in the Office of Planned Giving who addressed their questions and helped them decide how best to accomplish their goals. Kathy says, "They have answered every question, from how the portfolio is performing to how to make additional contributions." Dennis adds, "We feel confident that we made a good decision."