Charitable Remainder Trusts
Solutions for Large Donations
If you have built a sizable estate and also are looking for ways to receive reliable payments, consider a charitable remainder trust.
These types of gifts may offer you tax benefits and the option for income. There are two ways to receive payments and each has its own benefits:
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.
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 increases, so do your payments. If the value decreases, however, so will your payments.
An Example of How It Works
John, 75, wants to make a gift to Loyola Blakefield but would also like more income in the future. John creates a charitable remainder unitrust with annual lifetime payments to her equal to 6 percent of the fair market value of the trust assets as revalued annually. He funds the trust with assets valued at $500,000.
John receives $30,000 the first year from the trust. Subsequent payment amounts vary each year depending on the annual valuations of the trust assets. He is eligible for a federal income tax charitable deduction of $276,880* in the year he creates and funds the trust. This deduction saves John $88,232 in his 32 percent tax bracket.
*Based on annual payments and a 3.2 percent charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.
Calculate Your Benefits
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- Contact Adam Trice at (410) 823-0601 Ext 694 or firstname.lastname@example.org to talk about supporting Loyola Blakefield by setting up a charitable remainder trust.
- Seek the advice of your financial or legal advisor.
- If you include Loyola Blakefield in your plans, please use our legal name and federal tax ID.
Legal Name: Loyola High School of Baltimore Inc.
Address: PO Box 6819, Towson, MD 21285-6819
Federal Tax ID Number: 52-0704627
The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.