Why establishing a Charitable Remainder Trust was good for me

I bought my house in 1995 for $79,000, after I moved to Athens for a teaching and chair position. As a single professor, I was able to offer rooms to lecturers and visiting professors. I paid the mortgage off in 2005 and kept the house as a rental investment property ever since. With maintenance and improvements, this house increased in value to $250,000. When I turned 70 last year, the question was, “What do I do with that property: rent, sell or donate?”. 

The Don E. Adleta TypeShop and Bindery is named in honor of Don Adleta, BFA ’75, professor emeritus of graphic design in Ohio University’s College of Fine Arts. Photo by Ben Wirtz Siegel, BSVC '02 

If I continued renting it, I would get $1,575 a month or $18,900 annually. BUT, at 70+, I would have to do general maintenance, upkeep, and find new tenants every so often or pay someone to do these tasks. Also, there were the expenses associated with maintenance, insurance, property taxes, filing the tax forms for expenses and paying the income taxes. Which brought that income down to $0 for two years, when I had the roof soffits replaced and the house painted! On a good year the total income was $11,000. $11,000 for all that worry, work and time? My energy levels now and my better instinct said, “NOT!” to continue this.

If I sold it, I would have to pay a realtor and capital gains tax of 1/3 the value ($75,000) and end up with only $160,000. Depending on where I would invest that money, I might make 4% interest. Which would mean I could gain a taxable, $6,400 annually and/or deplete the investments to use it as cash as needed.

However, if I established a Charitable Remainder Trust, the trust would sell the property, I could defer capital gains tax and receive a 6% annual income stream. All this and The Ohio University Foundation would manage the trust. The trust can be directed to whatever meant the most to you at OHIO University. Some gifts and endowments can even bear your name in perpetuity! I decided this was the best way to go.•    1st – I designated that the trust would support my Alma Mater’s capital improvement of Seigfred Hall and create an operating budget for the Adleta TypeShop and Bindery in the School of Art that I developed during my tenure teaching at OHIO University.

•    2nd – I don’t have to do anything but sign the quarterly check from the trust. 

•    3rd – This continues until both my mate and I die! And 

•    4th – My mate, who I met at OU in 1996, and I can travel and get ready for growing old together. I highly recommend, if you have something of true value and the options were like mine, you consider transferring that property to a Charitable Remainder Trust. In my case, I receive $3,275 a quarter free and clear with the satisfaction that my gift to Ohio University is a real deal!