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Charitable Trust Is a Win-Win for Professor and Wife

Dr. Bhagawandas P. LathiDr. Bhagawandas P. Lathi, who retired a few years ago from a 39-year career as a professor of electrical engineering, is convinced that "Almost anyone in the Indian community can benefit from using a charitable remainder trust."

Charitable remainder trusts allow donors to sell stock, real estate and other assets tax-free, and to benefit good causes at the same time. Dr. Lathi and his wife Rajani, who live in Carmichael, a suburb of Sacramento, California, are co-trustees of their own charitable remainder trust which they established in 2001. They used the trust to sell the publishing rights to two of Dr. Lathi's books to Oxford University Press. "It was a win-win situation for everyone," he said.

Clearly two of the biggest winners were Hinduism Today and the India Development Relief Fund, which will receive equal shares of whatever remains in the trust after 20 years from the foundation date (that's 2021.) But the Lathis won as well. The use of the trust allowed them to bypass all tax on the $600,000 sale price for the publishing rights, to receive an immediate income-tax deduction, and to become the income beneficiaries of the charitable trust for 20 years. The income from the trust supplements their retirement plan.

"Hinduism Today has done a good job of defending the Hindu religion from outside attacks, as well as explaining it," Dr. Lathi said, describing why he chose the magazine to benefit from their trust. "We deeply value the Hindu tradition of letting people worship in their own ways for reaching the ultimate reality, eschewing proselytization and hegemony," he emphasized. "That's a message that Hinduism Today underscores." He bristles at the use of the word tolerance in interreligious discussion, declaring, "Tolerance implies you're putting up with an inferior position."

Of the two books with which the Lathis funded their trust, Linear Systems and Signals offers a 940-page development for undergraduates of signals as well as systems to process signals. This important area encompasses applications in such diverse fields as speech and image processing, satellite and space communication, biomedical systems, and aerospace, automotive and industrial applications. The Internet, cell phones, satellites and other electronic devices use signal processing routinely to transmit everything from text messages between teenagers to images from Jupiter.

Dr. Lathi, who is Professor Emeritus of Electrical Engineering at California State University, Sacramento, considered using a charitable remainder trust after attending a seminar on the subject and consulting with his attorney. "I suggest that people look at the charitable remainder trust very carefully," he urged. "It is a valuable philanthropic and estate-planning tool that has worked well for us."

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Use Giving Assistant to save money and support Hindu Heritage Endowment

A charitable bequest is one or two sentences in your will or living trust that leave to Hindu Heritage Endowment 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

Bequest Language

"I give [percentage of my estate, stated sum of money, designated property or balance of estate] to the [insert name of fund] of Hindu Heritage Endowment, a charitable trust whose Federal Employer Identification Number is 99-0308924, located at 107 Kaholalele Road, Kapaa, Hawaii, 96746-9304, USA."

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 HHE 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 gift 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 receive an immediate federal income tax charitable deduction. 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 HHE as a lump sum.

You fund this trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. 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 HHE 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 HHE where you agree to make a gift to HHE 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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