With a Charitable Remainder Trust (CRT), you can give to the college while securing a fixed or variable income stream for yourself.
- Variable Income: Charitable Remainder Unitrusts pay at least 5% of the annual value of trust assets. The payout changes with the value of trust assets, and is designed to increase over time (assuming rising asset values).
- Fixed Income: Charitable Remainder Annuity Trusts pay a fixed dollar annuity each year, equal to at least 5% of initial assets placed in trust.
- avoiding capital gains tax on assets put into the trust;
- enhancing disposable income;
- diversifying asset holdings, again without loss to capital gain tax;
- providing important tax benefits such as
- A deduction for a substantial portion of the value of the trust property.
- Lower estate tax, since putting property into a CRT shrinks one’s estate.
- Income for Retirement: A CRT sets property aside for the college, and is the source of a lifetime income stream for you and your spouse (or others). Some people consider their unitrust one of the most important components of their plans for retirement.
- Income for your family: A CRT can last for a lifetime, or up to 20 years, or a lifetime followed by up to 20 years. Your CRT can provide for your lifetime, and then make payments to your children or grandchildren. Including a CRT in your will would allow your loved ones to benefit from your resources before directing them to the college.
Grace, age 68, puts $100,000 in highly appreciated stock into a unitrust, names a trustee, and tells the trustee to pay her 5% of the trust’s assets as revalued every year. The trust will sell the stock, pay no capital gains tax, and reinvest the proceeds. Grace’s trust payments, $5,000 the first year, should rise as the trust increases in value, helping Grace stay ahead of inflation.
If you would like to see an example of a charitable remainder trust based on your age and an amount set by you, contact Patty Kellam at 757-789-1749 or firstname.lastname@example.org. Patty can illustrate for you a gift annuity based upon gift amount and other facts specified by you. You may also contact your attorney for professional advice beyond the scope of the college’s planned giving outreach program.