Charitable Remainder Trust

With a charitable remainder trust, you can receive income each year for the rest of your life from assets you give to the trust you create.  Your income can be either variable or a fixed amount.  After your lifetime, the balance in the trust goes to the charities of your choice.

Charitable Remainder Trust

  • You give cash or property to the trust.
  • You receive an income tax deduction and named individuals receive income for life.
  • Remainder goes to the Alliance for the Arts after your lifetime.

Your Possible Benefits

  • A partial charitable income tax deduction
  • Potential for increased income
  • Up-front capital gains tax avoidance
  • Professional management of trust assets available

Choose Between 2 Main Types

There are two types of charitable remainder trusts:

The 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.

Example:  Sandra, 76, owns several stocks worth $100,000 that currently pay dividends of only $2,000 a year.  She decides to give these stocks to a charitable remainder annuity trust.  She will qualify for a partial income tax deduction of $46,587, (1) receive $6,500 a year and provide a future gift to a qualified charitable organization.

The 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 increase, so do your payments.  If the value decreases, however, so will your payments..

Example:  Ron, 65, was looking for a gift vehicle that keeps up with the inflation and provides extra income during retirement.  He decides to give $1,000,000 to a unitrust that will pay him 6 percent of the trust assets each year.  Ron will also qualify for a partial income tax deduction of $396,140 (1) and provide a future gift to a qualified charitable organization.

To learn more about how you can support the Alliance for the Arts through a trust, contact us at (805) 449-2590.

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(1) Based on annual payments and 3.4 percent charitable midterm federal rate.

The information in this website is not intended as legal advice.  For legal advice, please consult an attorney.  Figures cited in examples are for hypothetical purposes only and are subject to change.  References to income tax apply to federal taxes only.  Federal estate tax, state income/estate taxes or state law may impact your results.

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