Law Briefs: Putting His Trust in GW [GW Magazine]
by Hope Katz Gibbs
GW Magazine
Law Briefs
June 1998
WHEN ARMAND CIFELLI (JD’50) GAVE a $100,000 donation to fund a professorial lectureship in his field of patent law through a Charitable Remainder Trust, he knew the money would create a perpetual legacy. And he knew the interest would provide a substantial income to him and his wife for the rest of their lives.
The retired attorney also knew that the money wouldn’t be made available to the school until after both he and his wife died. So he gave another $25,000 to the law school (in $5,000 annual increments) to begin the lectureship. The first to hold the position is Gerald J. Mossinghoff, JD ’6 1, former commissioner of the U.S. Patent and Trademark Office.
Cifelli made the donation to honor the professors who inspired him and to repay the institution that had made his career possible. “I couldn’t have realized my dreams without the education and support I received from GW Law School,” he says.
He was 22 when he entered the school in 1946. He had already served in the Navy, as a radar officer on a destroyer during World War 11, and he had studied engineering at the New Jersey Institute of Technology, Yale and Georgia Tech.
But the native of Newark, N.J., wanted to be an attorney. So, shortly after he was hired by the U.S. Patent Office as an examiner, he moved to Washington with his young bride, Irene. By day, Cifelli worked on patents. At night, he went to class at GW Meanwhile he and his wife started a family.
“Those were great days, wonderful days,” he says. “The other law students and I were so committed to what we were doing. Most of us were World War 11 veterans and very determined young men. GW Law provide us with an ideal educational environment
After graduation, Cifelli landed a job the Department of Defense in the legal adviser’s office of the Army Chemical Warfare Service. In 1953, he went to work for General Electric and spent six years as a patent attorney at its small-appliance divisional headquarters
in Bridgeport, Conn.
In 1959, he joined Wooster & Davis, the oldest patent law firm in Connecticut. The firm, now Wooster, Davis & Cifelli, grew significantly over the next three decades. Cifelli retired as senior partner in 1993, having won several high profile trademark cases.
One of those involved the Sports Car Club of America, the principal motor sports sanctioning organization for grand prix racing in the U.S. The SCCA had developed a competition called the Trans-Am Series.
Soon after, General Motors started selling the Pontiac Firebird Trans-Am, Representing the SCCA, Cifelli won a huge settlement, which included royalties from the sale of Pontiac Trans-Am cars.
Among many other activities, Cifelli chaired (in 1969) the Bridgeport Bar Association Committee that handled the dedication of a new U.S. Courthouse in the city, He served as president of the Connecticut Patent Law Association (1965-1966) and was a member of the Connecticut Bar Association Federal Judiciary Committee, which screened prospective federal judges (1978-1982). Moreover, he served as an adjunct professor of intellectual property law at the University of Bridgeport Law School (1977-1987) and as a member of the regional board of education in Easton, Conn. (1965-1967).
He is most proud, however family and his 50-year marriage to Irene. “I have had a great career, a wonderful family, and so far a terrific retirement,” he says. “I wouldn’t trade my life for anything.”
Benefits of a Charitable Remainder Trust
Armand Cifelli and many other donors know a charitable remainder Unitrust is a good financial investment. It is a gift plan, as defined by federal tax law, which allows donors to provide income for themselves and their spouses for life, or a term of years, while making a generous gift to GW.
In addition to gaining income from interest and a tax deduction, donors avoid capital gains tax on the asset’s growth and are able to reduce gift and estate taxes by removing the asset from the taxable estate.
How it works:
• A donor irrevocably transfers assets, usually cash, securities or real estate-to a trustee, such as GW or a bank trust department. During the Unitrust’s term, the
trustee invests the assets.
• Each year, the trustee pays a fixed percentage of the Unitrust’s value to one or more income beneficiaries. Payments must be at least five percent of the trust’s annual value and are made out of trust income (or trust principal if income isn’t adequate).
• When the Unitrust term ends, the principal passes to GW, to be used for the purpose the donor designates.
For example: a $100,000 gift of stock costs basis of $20,000 is contributed to GW for investment in a Charitable Remainder Unit rust. The trust will be used for a specific, pre-determined purpose. Assume the interest rate is 6 percent, and the donors, like the Cifelli, are 74 and 73. Then:
• The fair market value of the stock used to fund the trust is $100,000.
• The cost basis is $20,000.
• The charitable deduction is $43,391.
• Tax savings from the deduction amount to $13,451 (multiplying the deduction figure by the donor’s tax rate of 31 percent).
• The capital gains tax saving is $16,000.
• And the first year of income from the Unit rust totals $6,000. (Income varies depending on the size of the donation, the interest rate, and the timing of the gift.)
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