Giving through
a Revocable
Living Trust

MISSOURI SOUTHERN FOUNDATION
In Support of Missouri Southern State University

Revocable living trusts are one of the most popular trust set up for charitable purposes. With a revocable trust, the donor may appoint a trustee, make a gift now, add to it in the future, and maintain control of the assets. The term revocable is important because you may take back or change the conditions of the trust if your personal or financial situation changes. You also have a great deal of flexibility in how the earnings from the trust are distributed. You may designate the earnings be paid to the Missouri Southern Foundation, individuals such as your spouse or children, or use the earnings as income for yourself. The term living is used because the trust is created during your lifetime. Since you retain control of the assets in the trust, there is no charitable tax deduction when the trust is created however, some advantages of the revocable living trusts are:

• Assets in a trust bypass probate, and may help avoid estate taxes.

• Since the assets are not considered part of your estate, they pass directly to the Missouri Southern Foundation insuring your privacy by avoiding public scrutiny as part of the probate process.

• Your assets are not subject to probate costs.

• Dissatisfied heirs are less likely to successfully challenge the trust because you created it while living.

• The trust is revocable; therefore you can use the principal if necessary.

• Earnings generated by the trust and paid to the Foundation provide a charitable tax deduction.

Here is one example of a Revocable Living Trust:

Mrs. Smith, invested wisely during her working years and currently makes a $2000 contribution each year to the College. After careful consideration she has decided she would like to make a substantial contribution to the Foundation from her estate. She has decided to place "in trust for the Missouri Southern Foundation" the sum of $300,000. The earnings from this trust, about $18,000 each year are paid to the Foundation to be used as directed by Mrs. Smith’s trustee. Since the earnings are given to a charitable organization they are tax deductible. At the time of her death the assets in the trust will pass directly to the College avoiding probate and estate taxes.

This is only one example of how a revocable living trust can be used to meet the needs of a donor. In all cases, donors should consult their attorney, accountant, or estate planner when considering gift giving.