Income for Your Life
Trusts/Annuities

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When you create a charitable remainder trust, you guarantee a gift to the College in the future. In return, you receive an annual income from the assets you use to fund the trust, together with an immediate tax deduction. Your income can be a fixed amount (using an annuity trust) or a fixed percentage of the value of the assets redetermined annually (using a unitrust). The income lasts for your lifetime and/or another person's, or the trust term can be set for a certain period, not to exceed 20 years. Let's take a look at some of the advantages of establishing a planned gift with a trust.

EXAMPLE: A donor is 65 years old and uses $100,000 of appreciated securities with a cost basis of $10,000 to establish a planned gift that will pay him an income for the rest of his life. The securities are currently paying him a 2% dividend annually.

• Income tax deduction: Because the donor establishes a qualified charitable trust, he receives an income tax deduction of $43,000.
• Capital gains tax avoidance: The trust is able to sell the appreciated stock (or appreciated real estate) and reinvest the entire amount without paying a capital gains tax.
• Increased income: Generally, the donor receives an income much higher than the current yield.
• Estate tax avoidance: When the donor(s) dies, his estate receives a charitable deduction equal to the value of the trust assets.

Charitable Remainder Annuity Trust

The donor transfers cash or appreciated property in trust and reserves a fixed annuity interest, not less than 5% of the fair market value of assets placed in trust for life or term of years. The donor receives an income tax deduction equal to the present value of the College’s remainder interest.

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Charitable Remainder Unitrust Like a charitable remainder annuity trust, except that a fixed percentage– not less than 5% of the value of the trust assets revalued annually – is paid at least annually to income beneficiaries. more…
Charitable Gift Annuity Cash or appreciated property is gifted in exchange for an annuity. Donor receives an income tax deduction equal to the excess of the value of the contribution over the value of the annuity. Each annuity payment consists of tax free, ordinary and capital gain, depending on the character of asset gifted. Most organizations subscribe to the tables set by the Committee on Gift Annuities. Reinsurance is permitted. Many states are regulated by state insurance regulations. more…