Charitable Remainder Annuity Trust
© Connie Gelb
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By establishing a charitable remainder annuity trust you (and/or others you designate) receive fixed income either for a term of years or for life while ultimately helping to
provide material and financial assistance to retirees and caregivers for future generations. You can fund an annuity trust with cash or appreciated securities. Annuity trusts provide significant tax benefits along with paying regular income. This type of trust works best for individuals who would like a fixed income for a term of years. Another good option is a charitable remainder unitrust, which provides variable income with growth potential.
Benefits / Gift Requirements
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Fixed Income – You will receive fixed payments from the trust.
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Immediate Tax Savings – By creating a charitable remainder annuity trust, you can take an income tax charitable deduction in the year you make the gift. If you fund your annuity with appreciated securities, you will avoid or defer capital gains tax you would have paid had you sold the asset.
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Leave a Legacy – Your gift will ensure
retirees and caregivers will be helped across future generations. Become a Legacy Club member.
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Minimum Age: 50
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Minimum Dollar Amount: $50,000 in cash or securities
How It Works (example)
Howard owns securities that cost him $40,000 originally and are now worth $150,000. To ensure that his wife, Anne, age 60, will be financially secure, he donates his securities to establish a charitable remainder annuity trust. He names Anne as beneficiary for 20 years. Howard chooses an annual payment of 5 percent of the initial trust principal (the minimum IRS requirement). So, Anne will receive about $7,500 each year for 20 years. Howard can claim an income tax deduction of approximately $65,000 in the year he makes the gift (which is based partly on Anne's age when he made the gift). He also avoids capital gain tax on the $110,000 appreciation when the trust is created. After 20 years, the trust principal will come to us to be used for the
Organization priorities that Howard specified.
Charitable Remainder Annuity Trust Rates - Find out the current rates for one and two beneficiary charitable remainder annuity trusts.
Planned Giving Calculator - Calculate your own potential benefits from a charitable remainder annuity trust.
Contact Us
Would you like more information on charitable remainder annuity trusts, other gifts that provide income or becoming a Legacy Club member? Please contact us, e-mail
legacy@retirement-resource.org
or call us toll-free at (877) 855-3718.
If you would like a personalized proposal for a charitable remainder annuity trust, please let us know the date(s) of birth of the income beneficiary(ies) and the gift amount you are considering.
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Information provided on our Internet site is not intended to be tax or legal advice.
Rates used in examples are for illustrative purposes only. Please consult a qualified legal or financial advisor before making a gift.
| The Retirement Resource Organization, Inc. is a tax-exempt charitable organization under Section 501(c)(3) of the Internal Revenue Code.
Donations are tax-deductible. | |
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