CPA Jamie Boulette discusses how tax benefits of a charitable remainder trust helped his client discover her legacy.
MaineCF: How were you first introduced to the Maine Community Foundation?
In the early 2000s, a longtime client of mine, Wendy Penley, was serving on the MaineCF Board. She asked me if I would be willing to sit down with MaineCF’s vice president of development to learn more about the different types of charitable funds at MaineCF. Wendy thought it would be helpful to be aware of MaineCF’s charitable giving options in case I had clients who might be a good fit now or in the future.
A few years after meeting, an opportunity arose when one of my clients who had a large taxable estate wanted to do some estate tax planning. My client really did not know who she wanted to receive her assets. In fact, she was very specific about who she did not want to receive her assets. She said, “The real problem is, my husband passed away, we do not have children.” She didn’t have close ties to any charities and wanted to keep her income for her lifetime. “Therefore,” she said, “I think I’ll just do nothing.”
MaineCF: This sounds like an interesting meeting. What happened next?
We went back and forth for several months with different income and estate tax savings strategies. My client ultimately liked the concept of setting up a charitable remainder trust (CRT) because it allowed her to keep an income stream for the rest of her life, receive a huge income tax deduction at the front end when her assets were transferred to the trust, and take advantage of estate tax savings at the time of her death.
I was actually able to put together a flow chart to show her that if she gifted $1 million of her highly appreciated stock and she then lived for another seven or eight years, there would be little to no cost for her to make the gift. After the substantial income she would receive from the CRT during her life, the benefit of avoiding capital gains tax on the sale of the appreciated stock, the benefit of the charitable income tax deduction at the time of the gift, and the benefit of the estate tax deduction at the time of her death, she would really have the benefit of that entire $1 million back and there would still be funds available to support charitable causes after her death. She liked the idea, but told me she didn’t really have a preference for any charity.
MaineCF: So how did you initiate the conversation about finding a legacy that would mean something to her?
We just started easy with a few questions. What came from your past? What do you do? What do you appreciate? Initially she said, “Jamie, you coach hockey, why don’t you just give it to the hockey organization?” I thanked her, but explained that was too much money to give to the hockey program. Let’s talk about what you like, I said, and again asked her about her past. She looked up and said, “Well, I was a school teacher when I started my career in the ’40s. I was a teacher in Gouldsboro at the high school and I was a women’s basketball coach before I moved back to central Maine.”
This opened a door and we came up with the idea of setting up a scholarship fund for students from that school. She left the office that day very happy. She then came back even more excited after discussing the idea with her sister and told me that a scholarship fund is good, but that she also thought the historical society should get a piece.
By the time the CRT was completed, she had decided she and her sister would benefit from the trust’s income for their lifetimes and any remaining funds would be divided with half distributed to the Maine Community Foundation for a scholarship fund to support students graduating from the high school where she worked and the other half distributed to four additional charities.
MaineCF: What made you recommend the Maine Community Foundation for the scholarship fund?
I knew that it did not make sense for me to administer a scholarship for the rest of my career. MaineCF administers scholarship funds across the state so this made sense. This was my first time working with MaineCF and it was nice and easy. And most importantly, it made my client so excited to know that there would be a scholarship fund to live on in her name.
More than 50 Hancock County students have benefited from the generosity of Jamie Boulette’s client since she established her college scholarship at MaineCF – just under $60,000 in awards.
Jamie Boulette is a native of Waterville and University of Maine graduate. He co-founded and is president of Perry, Fitts, Boulette & Fitton CPAs. Boulette. He leads the team with a philosophy that giving back to the community is the foundation for a healthy business. He serves on MaineCF’s steering committee for a new Kennebec County Fund, and has chaired local boards that include Health Reach Network, Health Reach Community Health Centers, and Lakewood Manor. He also served as a board member for Central Maine Youth Hockey and The Forest Society of Maine, and assisted the steering committee in building Maine General Medical Center.
Photo: Jamie Boulette, pictured at Doubling Point Lighthouse, moved to Arrowsic with his wife, Sawyer, to enjoy more of the Kennebec River.
