A Gift With Flexibility

Barbara and Roy Adams

Barbara and Roy Adams

Barbara and Roy Adams know the importance of flexibility. During Roy’s 32-year career with Exxon, the couple lived overseas for 23 years in five countries and traveled to more than 50 countries, finely honing their adaptability and packing skills.

When Roy retired in 1993, the couple chose to move back to Houston, where they first met and where Barbara grew up. Barbara returned to volunteering at Texas Children’s as she had in her youth, becoming an active member of The Auxiliary to Texas Children’s. Roy enjoys sharing his expertise and experience with nonprofit organizations as a volunteer consultant with The Executive Service Corps of Houston.

When the Adamses began looking at their estate plans, they were attracted to the charitable remainder trust. With charitable remainder trusts, a determined percentage of assets provide current and future income to the donor and the remaining assets benefit the charitable organization.

Not surprisingly, the Adamses liked the flexibility of the charitable remainder trust. The trust can be designed to include multiple beneficiaries, it is amendable and contributions can be made by installments. The trust can be funded with cash, stock or property, and its potential benefits include increased income by converting appreciated low-yield assets without paying capital gains tax, in addition to a charitable deduction for income tax purposes.

“The flexibility to be able to fund the trust in installments helped us get started, while using the deductions in selected tax years,” Roy says. “Also, we think it is extremely important that multiple beneficiaries can be named because most people have more than one philanthropic interest.”

The Adamses designated charitable organizations include both of their alma maters and, of course, Texas Children’s Hospital. Barbara’s main interest is the hospital’s Pi Beta Phi Patient/Family Library, and Roy is particularly enthusiastic about the work of Texas Children’s Cancer Center.

By including Texas Children’s in their estate plans, Barbara and Roy are recognized as members of the Abercrombie Society, and their gift will help ensure that the hospital’s mission to provide quality patient care, research and education will continue well into the future.

“Texas Children’s brings a real value to the community,” Barbara says. “A lot of important things are going on there, and we want to support it as best we can.”

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A charitable bequest is one or two sentences in your will or living trust that leave to Texas Children's Hospital a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I give to Texas Children's Hospital, a nonprofit corporation currently located at Houston, TX, or its successor thereto, ______________* [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to Texas Children's Hospital or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to Texas Children's Hospital as a lump sum.

You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to Texas Children's Hospital as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and Texas Children's Hospital where you agree to make a gift to Texas Children's Hospital and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

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