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Charitable Remainder Annuity Trusts
What is a charitable remainder annuity trust?
A charitable remainder annuity trust is a separately invested and managed charitable trust that pays you, your spouse, and/or other beneficiaries a fixed annuity income for life or a term of years. You receive a charitable income tax deduction for a portion of your gift to the trust. No additional gifts are permitted. After the annuity trust terminates, the accumulated principal or "remainder interest" goes to CTS. Minimum gift is $??,??? and the advantages are considerable.
- Receive stable, predictable income (particularly appealing to older donors and income beneficiaries).
- Depending on how your trust is invested, much of your income could be taxed at the capital gains rate of 15%.
- Avoid ALL capital gains tax on any appreciated assets you donate.
- Reduced estate tax liability if your estate is at the taxable level.
- Enjoy the satisfaction of making a deferred gift to CTS during your lifetime.
If you want maximum flexibility and maximum effectiveness in your giving, consider a Charitable Remainder Trust (a CRT) benefitting Christian Theological Seminary. CRT's come in two versions. A unitrust pays you and/or other beneficiaries income as a fixed percentage of value of the trust principal. The unitrust is revalued annually, and income in excess of the percentage payout is reinvested. Alternately, an annuity trust pays you and your beneficiaries a fixed income.
CRT's may pay income to multiple beneficiaries, for life or a term or years. A unitrust may be structured to invest solely for growth for a term of years, an attractive way to help provide for future retirement or tuition needs while also making a substantial gift to CTS. An annuity trust may hold tax-free securities and pass tax-free income through to the beneficiaries.
You, your advisor, or a financial institution may serve as the trustee of a CRT. Christian Theological Seminary can provide advice and sample forms to help you set up your trust.
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Example
Comparison of Benefits: Unitrust and Annuity Trust
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This example is based on a factor that changes monthly. Contact our office for a personal illustration based on the latest rates.
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Assumptions:
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> Beneficiaries aged 72 and 70
> 28% income tax bracket
> Holding $100,000 in stock with $50,000 cost basis
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Unitrust
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Annuity Trust
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Contribution
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$100,000
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$100,000
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Income Rate
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5%
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5%
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First Year's Income
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$5,000
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$5,000
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Future Income
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Variable
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$5,000/year
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Charitable Deduction*
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$43,764
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$43,367
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*Based on a Federal Discount Rate of 5%.
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More
To learn more about charitable remainder annuity trusts, Email us, complete the Information Request Form, or call us at (317) 931-2313 so that we can assist you. Contact:
Wayne Pruner
Director of Planned Giving
Phone: (317) 931-2313
Email: wpruner@cts.edu |
