A Win-Win-Win Situation
By Karen Newell Young
When John and Trudy Armer began exploring charitable giving options, they had two priorities: setting up a gift annuity that would provide reliable income to them for the remainder of their lives and making certain the ultimate beneficiary of their gift would use those funds to support the worthy causes in which they believe.
They discovered that USC was especially qualified to meet both requirements.
The couple’s gift is now divided among three separate programs: the USC Law School, the USC Wrigley Institute for Environmental Studies, and the USC School of Policy, Planning and Development—from which John earned a master of science degree in 1951.
The Armers both were taken with the ability of the USC Law School’s Domestic Violence Clinic to assist battered women and their children with legal aid, as well as provide access to social service resources. Trudy Armer is especially committed to programs that protect the well-being of women and children. This stems from her work as a court-appointed special advocate (CASA) where she has seen firsthand the need and value of such services.
John Armer has been interested in environmental issues most of his life. Growing up practically at the beach stirred his concern for clean water and wetlands preservation. “For years I was busy with my company, but then I became more active as an environmentalist and very impressed with the work of the Wrigley Institute and [its director], Tony Michaels,” he says.
Although his interests are now centered on the environment, John Armer previously served as an instructor in public administration at USC. In 1956, he left the academic world to work in estate planning and health-care administration.
“In my insurance and financial-planning career I always reminded clients that an annuity is only as good as its guarantor,” he says. “USC meets that criterion in spades.
“Trudy and I feel we have a win-win-win situation: Our annuity meets the needs of our personal planning, it supports our chosen fields of interest, and it assists the university in maintaining its dominant role as one of the finest academic institutions in the world.”
Here is how a gift annuity can benefit the donor while creating a future endowment for USC:
- Dr. Trojan, age 75, transfers $500,000 in appreciated stock to USC
- She receives guaranteed income for her lifetime at a 7.3% yearly rate, or $36,500 a year
- Only 31% of her yearly income is taxed as ordinary income; 35% is exempt from income tax through 2015; the remaining 34% is taxed as long-term capital gain
- In the year of the gift, her charitable deduction is $187,907, which, at her 40% tax rate, saves her $75,163 in state and federal income taxes
- When adjustments are made for these tax benefits, Dr. Trojan’s taxable equivalent yield rises to 11.3%
- After her death, the remaining funds are used to establish the Dr. Trojan Endowment to provide enduring support for the purposes she specified
For more information, call Bob Davis, director of planned giving, at 213-740-1215.
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