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 Sanford. Minimum gift is $100,000 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 Sanford during your lifetime.
If you are interested in maximum flexibility and effectiveness from your gift, consider the charitable remainder trusts (CRT's) of Sanford School.
- Our unitrust pays you and/or other beneficiaries income as a fixed percentage of the principal. The unitrust is revalued annually, and income in excess of the percentage payout is reinvested.
- Our 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 Sanford. An annuity trust may hold tax-free securities and pass tax-free income through to the beneficiaries.
You, your financial institution, or Sanford School may serve as the trustee of a CRT. We presently ask for a minimum gift of $100,000 to establish a unitrust that we will trustee.
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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 302-239-5263 ext. 279 so that we can assist you.
