Paul R. Tierney Law

What Exactly Is a Trust?

“A trust is a legal vehicle that allows a third party, a trustee, to hold and direct assets in a trust fund on behalf of a beneficiary. A trust greatly expands your options when it comes to managing your assets, whether you're trying to shield your wealth from taxes or pass it on to your children.”

MSN Money’s recent article entitled “What is a trust?” explains that many people create trusts to minimize issues and costs for their families or to create a legacy of charitable giving. Trusts can be used in conjunction with a last will to instruct where your assets should go after you die. However, trusts offer several great estate planning benefits that you don’t get in a last will, like letting your heirs to see a relatively speedy conclusion to settling your estate.

Working with an experienced estate planning attorney, you can create a trust to minimize taxes, protect assets and spare your family from going through the lengthy probate process to divide up your assets after you pass away. A trust can also let you control to whom your assets will be disbursed, as well as how the money will be paid out. That’s a major point if the beneficiary is a child or a family member who doesn’t have the ability to handle money wisely. You can name a trustee to execute your wishes stated in the trust document. When you draft a trust, you can:

• Say where your assets go and when your beneficiaries have access to them
• Save your beneficiaries from paying estate taxes and court fees
• Shield your assets from your beneficiaries’ creditors or from loss through divorce settlements
• Instruct where your remaining assets should go if a beneficiary dies, which can be helpful in a family that includes second marriages and stepchildren; and
• Avoid a long probate court process.

One of the most common trusts is called a living or revocable trust, which lets you put assets in a trust while you’re alive. The control of the trust is transferred after you die to beneficiaries that you named. You might want to ask an experienced estate planning attorney about creating a living trust for several reasons, such as:

• If you’d like someone else to take on the management responsibilities for some or all of your property
• If you have a business and want to be certain that it operates smoothly with no interruption of income flow, if you die or become disabled
• If you want to shield assets from the incompetency or incapacity of yourself or your beneficiaries; or
• If you want to decrease the chances that your will may be contested.

A living trust can be a smart move for those with even relatively modest estates. The downside is that while a revocable trust will usually keep your assets out of probate if you were to die, there still will be estate taxes if you hit the threshold.

By contrast, an irrevocable trust can’t be changed once it’s been created. You also relinquish control of the assets you put into the trust. However, an irrevocable trust has a key advantage in that it can protect beneficiaries from probate and estate taxes.

In addition, there are many types of specialty trusts you can create. Each is structured to accomplish different goals. Ask an experienced estate planning attorney about these.

Reference: MSN Money (July 9, 2021) “What is a trust?”

What Happened to Charlie Daniels’ Estate?

“Charlie Daniels played his last show before the pandemic on March 13, 2020, at the Mark C. Smith Concert Hall in Huntsville, Ala. Hunkered down at home in Mt. Juliet, Tenn., he spent the following months telling anyone who would listen — his son, journalists — that he couldn’t wait to get back on the road, where he still played up to 140 dates a year, an ambitious schedule for any artist, much less an 83-year-old.”

Billboard’s recent article titled “How Charlie Daniels' Family and Team Are Locking In His Legacy” explains that before that could happen, though, Daniels suffered a hemorrhagic stroke on July 6 and died later that day in a Hermitage, Tennessee hospital. Now, a year later, Charlie Daniels Jr., the singer’s only child is planning to preserve the artistic legacy of the country legend. The country singer did have a last will, and he was also survived by his wife, Hazel. Nonetheless, he hadn’t done much estate planning.

“He was champing at the bit to get back on the road,” remarked Charlie Daniels Jr., who worked for his father for 20 years. “We had no idea this was coming,” says Daniels Jr. “After the initial shock, we had to start trying to sort through it all.”

The review of the Daniels estate includes combing through his holdings, such as music royalties, recordings, instruments and equipment for tax evaluation. “There’s a lot of work to be done,” says David Corlew, who worked with Daniels since 1973, managed him since 1989 and had run Blue Hat Records with him since 1997. “It took us 50 years to build what Charlie represented, so we’re not going to unravel it anytime soon.”

Charlie Daniels was best known for his dynamic fiddle playing and Southern rock barnburners like “The Devil Went Down to Georgia” (his only No. 1 hit on Billboard’s country chart), “The South’s Gonna Do It Again,” and “Long Haired Country Boy.” However, he was also a top-notch musician who played on Bob Dylan’s Nashville Skyline album and toured with Leonard Cohen.

Blue Hat has released Duets, Daniels’ first posthumous collection. This album combines the 2007 album Deuces—which included collaborations with Dolly Parton, Darius Rucker, and Brad Paisley—with previously released duets, including one with Garth Brooks. “Charlie always liked dedications on every album,” says Corlew, “and we decided we would dedicate this one to the greatest duo of all — him and Hazel.”

Corlew estimates that the singer’s vault contains at least 40 master recordings, including multiple previously unreleased tracks, that he owned, as well as decades’ worth of Volunteer Jams, the now-legendary concerts Daniels hosted from 1974 to 1996 at various venues around Nashville and starred a wide range of artists, from Billy Joel and James Brown to Don Henley and John Prine.

Daniels Jr. is also working with Sony to release or reissue recordings from Daniels’ 1975-91 tenure on Epic Records, especially Honky Tonk Avenue, an unreleased concept album Daniels recorded in 1984, when he was moved from Epic in New York to the company’s Nashville division. “The powers that be in Nashville didn’t think it was commercial country enough,” says Daniels Jr.

The younger Daniels has also set up Charlie Daniels Brands to house licensed product partnerships, including a line of meats from Tyler County Market that launched shortly after his dad’s death.

“Some people saw it as ‘They’re just trying to capitalize on Dad’s death,’ not knowing you can’t put a deal like this together overnight,” says Daniels Jr. “It had been going for years.”

Daniels’ estate also closed the singer’s touring operation, laying off 25 staffers and it’s in the process of selling some of his work and personal items through a music memorabilia.

“We have 4,000 pieces of equipment we need to sell, but it’s hard for me to walk into that studio,” says Corlew. “It’s heart- tugging. There’s this sentimental aspect to every part of this wind-down. Everywhere you look, there’s Charlie.”

Reference: Billboard (June 24, 2021) “How Charlie Daniels' Family and Team Are Locking In His Legacy”

Why Did Texas Siblings Come to Blows Over Inheritance?

“In a lawsuit filed by Stacy Alley in a Tom Green County District Court, the woman alleges that her brother, Michael Gene Mowrey, ‘threatened her, by stating he was going to cut her throat and kill her.’”

A lawsuit in Texas alleges that Michael Mowrey hit his sister Stacy Alley, shoved her and choked her. He was criminally charged with felony assault and accepted a plea deal.

However, these criminal proceedings do not result in repayment to the victim.

San Angelo Live’s recent article entitled “Sibling Choked Over Inheritance” reports that the reason for the incident wasn’t stated by the plaintiff in the court documents. However, court documents do reveal that their father's inheritance was an object of contention.

Alley originally brought the lawsuit against her brother for monetary damages for medical bills, legal fees, lost wages and the emotional effects of the life-threatening attack.

Instead of going to trial, the brother and sister agreed to submit to mediation.

The results of the mediation were recently released. The outcome is binding.

They agree to partition or split the 446-acre cotton farm owned by their deceased father Gene Mowrey. In the agreement, Alley gets 306 acres and Mowrey gets 140 acres.

Mowrey must convey his one-half interest in the estate’s Oklahoma minerals to Stacey Hamilton (another sibling), along with his one-half interest in the escrowed mineral production attributable to the Oklahoma minerals.

The two sisters (Hamilton and Alley) are required under the deal to execute a deed that conveys all of their rights, title and interest in their father’s home to Michael. As a result, he will own 100% of that home.

The reason for the violent incident appears to have been a fight over their inheritance.

It was not clear if Michael Mowrey suffered any real losses as a result of the outburst.

While he lost a majority of the rights to the family cotton farm, and his share of the family’s mineral rights, he gained the home.

Reference: San Angelo Live (June 27, 2021) “Sibling Choked Over Inheritance”

Who Inherited from the Painter Bob Ross?

“Bob Ross definitely didn't make a happy little accident when handling his estate and his likeness after he died in 1995. He made a big mistake.”

Like many painters before him, Bob Ross's image only took hold after his untimely death. He's now a pop culture icon, and is featured as bobbleheads, Chia pets and has his own cereal.

However, there's a reason why we see so much more of the gentle painter than ever before. That’s because of a legal battle for ownership of Ross's name. That was the only item of value in his estate, which is rare for celebrities of his caliber.

Wealth Advisor’s recent article entitled “Here's Who Inherited Bob Ross' Estate, And Where They Are Now” reports about what happened to his estate, who controls it and where they are today.

The Daily Beast wrote that Ross is "a smash hit on social media, where he feels more like a Gen-Z influencer than a once semi-obscure PBS celebrity who rose to fame in the 1980s on the back of his bouffant hairdo, hypnotic singsong baritone and a timeless message about the beauty of the world around us."

However, he wouldn't have become a household name, if not for Bob Ross Inc. The battle began when the artist met Bill Alexander, a celebrity painter who had a show on PBS, in 1978. Alexander gave him a job as a traveling art instructor. Ross met Annette and Walt Kowalski at a class, who recently lost their son, and who wanted to learn how to paint.

The Kowalskis convinced him to come to Washington, D.C. to teach. They eventually made a deal: they'd give him a stipend and room and board, if he'd teach more classes that they'd arrange in the area. PBS then asked Ross to do a show like Alexander's, and Dennis Kapp, the owner and CEO of the art-supply company Martin F. Weber, wanted to develop a line of supplies with him too. Soon, The Joy of Painting was born. However, to look after the supply company with Kapp, Ross and his wife Jane, and Annette and Walt signed documents to create Bob Ross Inc., with all four of them being equal partners.

At the end of the 1980s, all four partners were making $85,000, and in the early '90s, Ross made around $120,000. However, he wanted to branch out, and when he did, the happy days were at an end. When Ross's health started to decline, Walt "declared war" and sent Ross documents saying the Kowalskis owned everything, but they'd agreed that Ross and his heirs would get 1% of the revenues for the next decade. Ross never signed anything, and in fact, he quickly changed his last will to make it harder for the Kowalskis to steal his name and likeness.

Those changes to his last will included "a clause specifically addressing his name, likeness and the rest of his intellectual property. All of those rights were to go to Steve and one of Bob’s half-brothers." His third wife replaced Annette as the administrator of his estate. In July 1995, the painter lost his battle to cancer.

When Ross died, Bob Ross Inc. was totally owned by the Kowalskis. However, they wanted it all, including his name and likeness. Then what one of Ross's good friends calls "Grand Theft Bob" began.

Steve did not know about the final amendment until 20 years later when his uncle Jimmie, the estate's executor, informed him. When Ross died, he was worth $1.3 million. Half of that was his third part of Bob Ross Inc., and there was also cash, stocks and property to divide.

The Kowalskis went after Ross's art supplies and artwork and made "claims against the estate for business and personal reimbursements," charging Ross's widow with hefty lawsuits and suing PBS and the children's show Ross guest-starred on. In 1997, Jimmie, Ross's brother, settled the lawsuit, practically handing over everything to the Kowalskis. In 2012, their daughter Joan took over, opening up the realm of merchandising for the company.

However, there was still a "grey zone" in how Bob Ross Inc. could truly own Ross's name and likeness. After learning about that amendment in Ross's will, Steve went after Bob Ross Inc. but didn't win his case against Bob Ross Inc.

Joan did strike a deal with him: if he surrendered his rights to Ross's name and likeness, he could print his name on anything he wanted.

The good news was that Steve was able to return as an art instructor, and thanks to Bob Ross Inc., Ross was bigger than ever. That helped class sizes, and students came in masses to learn the iconic style. Steve gets to run his father's estate, and fans welcomed him back to the painting world. Despite the fact that the Kowalskis got everything, they were the only ones who could have kept Ross's name from disappearing.

As for all of Ross's paintings the Kowalskis seized, they ended up in an unprotected warehouse until the Smithsonian took a collection of them.

Reference: Wealth Advisor (June 28, 2021) “Here's Who Inherited Bob Ross' Estate, And Where They Are Now”

Last Wills Part of a New Comedy Series Online

“In her role as Philadelphia Register of Wills, Tracey Gordon has often heard people say they don’t want to discuss wills and estate planning with their relatives because they’ll think they’re out to get them, like it’s some elaborate and sinister plot torn straight from a Hollywood movie.”

The Philadelphia Inquirer’s recent article entitled “From ‘Boyz N the Hood’ to ‘Parks and Rec,’ the Philly Register of Wills is using pop culture to talk about wills,” says that to try to inform the public, the Register of Wills office in Philadelphia is turning to Hollywood and humor to help demystify estate planning and promote positive conversations around last wills through a new online video series called “The Register Reacts.”

Based on a popular video format on social media, in which individuals record themselves reacting to movies, music, and TV shows, “The Register Reacts” features Philadelphia’s Register of Wills, Tracey Gordon, and the office’s solicitor, Sharon Wilson, reacting to clips about death wealth, and wills from movies like Boyz N the Hood to TV shows like Game of Thrones. In the first episode, the two discuss a clip from the sitcom “Parks and Recreation,” in which Ron Swanson, a deadpan machismo outdoorsman, reveals he wrote his last will at age eight on a tiny piece of paper he keeps in his wallet.

“Upon my death all of my belongings shall transfer to the man or animal who has killed me,” reads Swanson’s will, which ends with unrecognizable symbols that only “the man who kills me will know,” he says.

“Hilarious,” Gordon says while watching the clip. “Well, first of all, you can’t have a will at 8 years old. Wills are invalid until you turn 18 years old.”

Wilson says that if you can fit your last will into your wallet, it’s probably a little too short. However, she adds that symbols can be added to a will, if someone wants.

“This format is very popular on Facebook and YouTube right now,” he said. “We want to teach people about estate planning and generational wealth, which is often a little dry, so I think it’s good we can use pop culture to draw people’s attention to what we’re doing.”

Wilson said when topics like last wills and estate planning come up, people’s eyes tend to glaze over because they think this is only for the wealthy.

“This kind of stuff helps. If you notice, in all those clips nobody was rich, except for in Game of Thrones,” she said. “I spent the last 20 years educating people in trusts and estate issues. I focus on communities not getting this done and, for the most part, it’s women of all shades and people of color. I wanted to emphasize you can do this, it’s not beyond you.”

One of the reasons Gordon is proactive about telling the public about wills and estate planning is because of all the drama she sees at her office when people die without a will and their family members come before her to argue their claim to the estate.

While the series may not result in the first Emmy ever awarded to a Philadelphia row office, Gordon hopes it leads to greater awareness and more open discussions between family members about wills and estate planning.

Reference: Philadelphia Inquirer (June 25, 2021) “From ‘Boyz N the Hood’ to ‘Parks and Rec,’ the Philly Register of Wills is using pop culture to talk about wills”

Court Upholds Kelly Clarkson’s Prenup

“Kelly Clarkson had reason to celebrate on Wednesday after learning that a judge has upheld the prenuptial agreement in her bitter divorce battle with ex-husband Brandon Blackstock.”

News outlet TMZ reported that Kelly Clarkson was on the set of her TV show, The Voice, when she heard the news and “let out a scream” of joy, with fellow coaches Blake Shelton and Ariana Grande about her prenup.

The Daily Mail’s recent article entitled “Kelly Clarkson's prenup UPHELD by judge in divorce battle” says that while Clarkson was filming the singing competition, she received an email from her lawyers informing her of the good news that her prenup had been kept in place. As a result, she’ll keep the bulk of her assets and income.

In July, Clarkson, who is estimated to be worth $45 million, was ordered to temporarily pay ex-husband Brandon Blackstock about $200,000/month in spousal and child support. Court documents also showed some details of Clarkson's finances: she personally earns $1,583,617 a month. With the court’s decision, Clarkson will keep most of their assets, including the Montana ranch where her ex-husband is currently living.

Blackstock had been contesting the prenup and wanted to split their properties 50/50, as well as the money she earned throughout their marriage, but a judge denied this request.

A judge found for Clarkson that the signed prenup had to be taken into account. The pop star now has the right to sell the Montana ranch because she’s the one who bought it.

The parties’ divorce has been bifurcated—which means that the end of the marriage has officially been declared. Clarkson has been awarded primary custody of their minor children - River and Remington.

It was previously reported that Clarkson would pay 70% of her children's school fees and expenses. However, she had refused to pay for the Montana ranch. The judge ordered that Blackstock carry the financial burden of his Montana ranch that costs around $81,000 a month to run in expenses. Now it looks as though Clarkson will sell it.

Blackstock is currently living at the ranch and is using it as his primary residence. He’s earning around $10k a month. In comparison, Clarkson was bringing home around $1.5M a month.

Court documents confirm that Kelly will continue to pay her ex $150,000 per month while the divorce case continues, as well as $45,000 in child support. Clarkson has sold a staggering 25 million albums and 45 million singles worldwide in her career, and currently has her own hit talk-show. She started dating Blackstock, a country music manager, in 2011. They married in 2013.

Reference: Daily Mail (Aug. 13, 2021) “Kelly Clarkson's prenup UPHELD by judge in divorce battle”

Medicare or My Employer’s Health Plan better Option?

“Should we take Medicare or keep an employer health plan?”

Let’s say that you work full time and have a very good medical insurance plan, but it’s costly, especially if you also have been covering the rest of your family. Say that the spouse is 60 and permanently disabled and has been told he’s eligible for Medicare. A common question is whether the working spouse should remove the disabled spouse from the employer’s coverage and go with Medicare. What’s the best option?

NJ Money Help’s recent article entitled “Should we take Medicare or keep an employer health plan?” explains that there are different components of Medicare to cover specific services: Medicare Part A, Part B, and Part D.

Medicare Part A helps pay for hospital and facility costs. Medicare Part B helps pay for medical costs, like doctors and medical supplies. Medicare Part D is for prescription drug coverage. Most people don’t pay a monthly premium for Part A, but there are premiums associated with Part B and Part D coverage.

If an individual is 65 and has received disability benefits from Social Security for 24 months or has received certain disability benefits from the Railroad Retirement Board for 24 months, he or she will automatically get Medicare Part A and Part B.

You should also know that you can decide to delay Medicare Part B by contacting Social Security after you become eligible, and you receive the card. Discuss this option with your employer’s health care benefit department to understand how Medicare may or may not work with your current coverage. This is because there are some plans and health benefit plans (especially those with fewer than 20 employees) that become secondary to Medicare, when an enrollee becomes eligible for Medicare.

If you decide to participate in Medicare Part B, understand that there’s a cost. The premium is based on your income, and the standard Part B premium in 2021 is $148.50 per month, if your income was $176,000 or less in 2019 for a married filing joint return. The Medicare Part B premium increases as your income increases.

Medicare Part B pays for many of your medical bills. However, not all the costs for covered health care services and supplies are included. As a result, many seniors buy a supplemental insurance plan, called Medigap. This plan will pay for some of the remaining health care costs, like co-payments, coinsurance and deductibles that are not covered by Medicare.

Remember that it’s important to enroll in Medigap coverage within six months following Medicare Part B enrollment. Medigap is an additional cost along with your Medicare Part B premium and is sold through a private insurance company. To determine what will be more cost effective, you’ll need to compare the Medicare costs with your employer plan.

Reference: NJ Money Help (Aug. 13, 2021) “Should we take Medicare or keep an employer health plan?”

How Do Taxes Work If I Live in One state and My Spouse Another?

“What happens to taxes if I move to Florida and my wife stays in N.J.?”

It’s not uncommon for one spouse to retire while the other spouse continues to work. It’s also not uncommon for a couple to own a home in two states (think primary residence and vacation home or cabin). Dick, the retired spouse in our example, stays in their Florida home more frequently than his wife, Jane, because of her job. She’s still in New Jersey. Dick’s now in Florida about half the year. He has a deferred salary he earned while working back in the Garden State, and it will be paid out annually over the next eight years. Dick will be required to pay federal and New Jersey income tax no matter where he lives, and he says he’s okay with paying his fair share. Should Dick become a Florida resident and what happens if Jane stays a New Jersey resident?

NJ Money Help’s recent article entitled “What happens to taxes if I move to Florida and my wife stays in N.J.?” says that the primary reasons why people change their resident state are taxes and retiring from their employment. Based on Dick’s willingness to continue to report his deferred income as a New Jersey source and pay New Jersey taxes, he should have no problem claiming Florida as his domicile if he takes the proper steps.

A domicile is the place you consider to be your permanent home, even if you may have multiple residences. Besides the test of your presence in a state, the other major factors in establishing a change in domicile are demonstrating intent to remain in the new state and to abandon your former domicile. These are more difficult to prove than physical presence. There’s also no one factor that tax authorities consider conclusive.

Since Jane will remain a New Jersey resident, Dick will have to plan carefully to prove his intentions. Some of the steps might include:

• Transferring voter registration and voting in local elections in the Sunshine State
• Changing the address on personal bank and investment accounts
• Changing his driver’s license, car license, and registration
• Establishing relationships with professionals, such as doctors or accountants, in Florida; and
• Updating his legal documents such as wills, trusts, powers of attorney and living wills with Dick’s Florida address.

While no one thing will make or break Dick’s domicile claim, taxpayers are wise to provide as much evidence as possible to tax authorities. Although income taxes aren’t the primary reason for claiming Florida as his domicile, most taxpayers are motivated to change their domicile to a state with a lower tax or no tax rate like Florida. The state a taxpayer leaves, such as New Jersey, will focus on clear and convincing facts that support Florida as Dick’s new domicile state.

As for tax reporting, when it comes time to file Dick’s tax return, he has the ability to change his domicile to Florida while Jane continues to work in New Jersey and claim New Jersey as her domicile. They can continue to file a joint federal tax return, but Dick would then file separately for New Jersey state purposes.

Reference: NJ Money Help (Aug. 12, 2021) “What happens to taxes if I move to Florida and my wife stays in N.J.?”

How Do I Sell a Home in an Irrevocable Trust?

“I’m a trustee selling a home in irrevocable trust for a parent who died. There are two beneficiaries who will get the sale proceeds with a stepped-up basis. I’m filing Form 1041 but do I still have to file a Form 1040 to report anything for the beneficiaries?”

A trustee who sells a home in irrevocable trust for a parent who died should know that generally, assets transferred to an irrevocable trust will be deemed a completed gift and will not be included in an estate for estate tax purposes.

Lehigh Valley Live’s recent article entitled “What happens to tax on a home sold from a trust?” explains that this means there wouldn’t be a step-up in basis to the fair market value upon the decedent’s death.

Remember that an irrevocable trust is a type of trust in which its terms can’t be modified, amended, or terminated without the permission of the grantor's named beneficiary or beneficiaries.

Irrevocable trusts have tax-shelter benefits that revocable trusts to don’t.

However, an irrevocable trust can be created so that the settlor (the creator) of the trust keeps certain rights and powers, so that gifts to the trust are incomplete.

In that instance, the assets are included in the settlor’s estate upon death and obtain a step-up in basis upon the decedent’s death.

If the trust sells the asset in the trust, the trust may need to file Form 1041, U.S. Income Tax Return for Estates and Trusts, and the trust may be required to pay a tax.

If the trust distributes any income to the beneficiaries in the same tax year it receives that income, the income is passed through to the beneficiaries, and the beneficiaries must report it on the beneficiaries’ individual tax returns (Form 1040) and pay any tax due.

It’s generally a good idea to report and pay tax at the individual rate instead of at the trust or estate level.

That’s because the trust or estate will begin to pay tax at the highest rate at only $13,150. In comparison, an individual doesn’t pay tax at the highest rate until his or her income exceeds over $440,000.

Note that an irrevocable trust is a more complex legal arrangement than a revocable trust. As a result, there might be current income tax and future estate tax implications when using this type of trust. It’s wise to seek the assistance of an experienced estate planning attorney.

Reference: Lehigh Valley Live (Aug. 16, 2021) “What happens to tax on a home sold from a trust?”

Couple’s Charitable Remainder Trust Helps University Students

“Minnesota State University, Mankato President Edward Inch announced today that Robert Larson of Leesburg, Florida, has donated $1.4 million to the University in honor of his late wife, Virginia Larson, a Minnesota State Mankato alumna, who taught elementary school for 12 years.”

Florida resident Robert Larson of Leesburg recently donated $1.4 million to the Minnesota State University, Mankato in honor of his late wife, Virginia, the Minnesota State University, Mankato recently announced.

A story entitled “Minnesota State Mankato Receives $1.4 Million Gift to Support Education, Music, ROTC Scholarships” said that Larson’s gift will support scholarships for students studying elementary education (75%) and music (20%), and the remaining 5% is earmarked to establish Minnesota State Mankato’s first Reserve Officer Training Corps endowment. At least 14 students annually will receive scholarships as a result of the gift.

“This gift is especially meaningful because of the many years that Robert and Virginia Larson spent planning for it,” said Minnesota State University, Mankato President Edward Inch.“ Students will benefit from this gift for many generations to come.”

The Larson’s originally planned their gift by creating the university’s first-ever charitable remainder trust in 1987. The trust was set up to benefit University students after both Robert and Virginia died.

A charitable remainder trust (CRT) is a gift of cash or other property to an irrevocable trust. The donor gets to keep an income stream from the trust for a term of years or for life. The charity then gets the remaining trust assets at the conclusion of the trust term. The donor receives an immediate income tax charitable deduction when the CRT is funded, based on the present value of the assets that will eventually go to the named charity.

Mr. Larson later decided he wanted to give a larger sum to the university to be able to have an effect on students while he was still living. Therefore, he decided to forego the annual payments he received and terminated the charitable remainder trust early.

His wife Virginia graduated from Minnesota State Mankato in 1961 with a bachelor’s degree in elementary education. She began teaching fourth grade in Lakeville, Minnesota. She then taught third grade in Poway, California, and finally taught fourth grade and English as a second language in Chula Vista, California. She died in 2020.

“Virginia really enjoyed her time as a student at Minnesota State Mankato, and we started planning for this gift out of a desire to help students,” said Robert Larson.

Reference: Minnesota State University, Mankato (August 12, 2021) “Minnesota State Mankato Receives $1.4 Million Gift to Support Education, Music, ROTC Scholarships”