Charitable Remainder Trust
Solutions for Large Donations
If you have built sizable assets and also are looking for ways to receive reliable payments, consider a charitable remainder trust.
These types of gifts offer you tax benefits and the option for income. There are two ways to receive payments and each has its own benefits:
An annuity trust pays you, each year, the same dollar amount you choose at the start. Your payments stay the same, regardless of fluctuations in trust investments.
A unitrust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. The amount of your payments is redetermined annually. If the value of the trust increases, so do your payments. If the value decreases, however, so will your payments.
An Example of How It Works
Susan, 75, wants to make a gift to the UUA but would also like more income in the future. Susan creates a charitable remainder unitrust with annual lifetime payments to her equal to 5 percent of the fair market value of the trust assets as revalued annually. She funds the trust with assets valued at $500,000.
Susan receives $25,000 the first year from the unitrust. Subsequent payment amounts vary each year depending on the annual valuations of the trust assets. She is eligible for a federal income tax charitable deduction of $302,140* in the year she creates and funds the trust. This deduction saves Susan $99,706 in her 33 percent tax bracket.
If Susan wanted to create a charitable remainder annuity trust with the same funding, she would recieve $25,000 the first year from the annuity trust. She is eligible for a federal income tax charitable deduction of $268,530* in the year she creates and funds the trust. This deduction saves Susan $88,615 in her 33 percent tax bracket.
*Based on annual payments and a 2.4 percent charitable midterm federal rate. Deductions vary based on income earned.
Discover Gifts That Pay
Your payments depend on your age at the time of the donation. If you are younger than 65, we recommend that you learn more about your options and download this FREE guide Plan for Retirement With a Deferred Gift Annuity.
Calculate Your Benefits
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