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This Old House: A Gift to Stanford Helps Pay for Retirement
When Steven and Karen Ross began planning their retirement, they debated what to do with their Palo Alto home. They had lived in the same house for 40 years, and the appreciation was going to translate into a significant tax burden.
A friend of Steve's suggested he contact Stanford's Office of Planned Giving to explore options. Even though neither Steve nor Karen is an alum, Stanford had long been an important part of their lives. "It's our de facto university," Steve explains.
What they learned was that they could contribute a partial interest in their home to a charitable remainder unitrust and retain the remaining portion. Upon sale of the property, they were able to use the proceeds from sale of the interest they retained to help them move to a retirement community nearby. The proceeds in the unitrust provide the Rosses with income payments for life and a meaningful way to support Stanford in the future.
This arrangement has had enormous benefits from Steve and Karen. "We turned the equity from our house into what it takes to get into a senior community, which is very expensive around here," says Steve. "It was also a very good way to support an organization we feel connected to."
A charitable remainder unitrust, like the one established by Steve and Karen, is an excellent vehicle for gifts of appreciated stock or property because proceeds from the sale are generally not subject to capital gains tax at the time of the sale. With Stanford serving as trustee, the assets are invested by the Stanford Management Company and the beneficiaries--in this case, the Rosses--receive annual income payments.
The remainder of the trust will benefit Stanford's Haas Center for Public Service, which helps students engage in service and community partnerships. Steve says the mission of the Haas Center resonates for both him and Karen, as they are spending their retirement doing volunteer work. Karen sits on the boards of various non-profits in the mid-peninsula, and Steve works on adult and child literacy, and tutors elementary school students. "Supporting the Haas Center just made sense for us."
Steve grew up next door to Stanford football coach Chuck Taylor, whom he described as his childhood idol. He and Karen met at Purdue University in Indiana, and then moved back to the Bay Area. They raised their two children in their Palo Alto home and became dedicated Stanford men's basketball fans. In 1981, they volunteered to become a host family for international students coming to study at Stanford, through a homestay program organized by the Bechtel International Center. Over the years, they hosted almost 15 international students, and they have stayed in touch with many of them. Last summer, they traveled to Switzerland to visit a past homestay student; this summer, they will do the same in Spain.
Back home, the Rosses find themselves telling their friends about the benefits of setting up a charitable remainder unitrust. Steve says he and Karen were impressed with Stanford's supportive staff, including Fred Hartwick in the Office of Planned Giving. "Fred worked closely with us to make sure we were asking the right questions," Steve says. "We made a gift that we know will go a long way, and we're happy we did."