The University of North Carolina at Chapel Hill Foundation, Inc., is available to serve as trustee of charitable remainder trusts established to benefit the University. The Foundation may serve as trustee of a trust if the remainder is irrevocably designated for the benefit of the University or any of its schools, units, departments or for any of the University’s affiliated foundations. If you have charitable interests other than the University and wish for the Foundation to serve as trustee, it can do so as long as at least 51 percent of the remainder is irrevocably designated to Carolina. The minimum amount required to fund a trust in which the Foundation serves as trustee is $100,000.
Carolina’s Charitable Trust Investment Program consists of two options for the investment of the charitable remainder trusts for which the Foundation serves as trustee: the endowment investment strategy and the testamentary charitable remainder trusts.
The Endowment Investment Strategy
The Endowment Investment Strategy for Charitable Remainder Trusts allows a trust to be invested in units issued by the Foundation that will track the performance of The University of North Carolina at Chapel Hill Investment Fund, Inc. This strategy provides access to the same investment returns as the University’s endowment assets. Trusts invested in the Endowment Investment Strategy are required to have 100 percent of the remainder irrevocably designated for the benefit of the Foundation, the University or any of its schools, or affiliated foundations. The Traditional Investment Strategy for Charitable Remainder Trusts allows a trust to be invested in investment partnerships specifically created at Carolina to invest the assets of charitable remainder trusts. These partnerships in turn invest primarily in diversified mutual funds, both domestic and international, selected by the foundation in consultation with UNC Management Company, Inc.
Testamentary Charitable Remainder Trusts
It is also possible to create a charitable remainder trust as a part of your estate plan. With a testamentary trust, you direct part or all of your estate to be left in a charitable remainder trust, with income to be paid to one or all of your estate to be left in a charitable remainder trust, with income to be paid to one or more beneficiaries. Upon the death of the final income beneficiary, the principal will be used as you designate. It is also possible to use retirement plan assets to fund a trust at your death and eliminate multiple layers of taxes.
A testamentary charitable remainder trust is particularly attractive to someone who wishes to provide adequate income for a spouse or another relative but wants the remainder of the trust to come to the foundation. In addition to providing for loved ones and helping medicine at UNC, this type of gift can also produce significant tax savings in your estate.