The Win-Win Advantages of a Charitable Remainder Trust
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Do your dreams for Breck include making a significant gift? If so, and you've built a sizeable estate, then a charitable remainder trust might be a good choice for you. By securing your family's financial stability first, you can gain peace of mind while supporting Breck — a community that shares your values and has great meaning to you. You can make a gift to Breck that allows you to receive regular payments for yourself or others you choose — for example, your spouse, your aging parents or a sibling — for a lifetime. What's left after the lifetimes of those receiving payments goes to improving the Breck experience for our students and creates an enduring connection for the future.
Benefits of a charitable remainder trust include:
- A partial charitable income tax deduction in the year you make the gift
- Potential for increased income for you or loved ones
- Up-front capital gains tax avoidance
There are two ways to receive payments with 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.
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
Susan, 60, wants to make a gift to Breck School but would also like more income in the future. Susan 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. She funds the trust with assets valued at $250,000.
Susan receives $15,000 the first year from the trust. Subsequent payment amounts vary each year depending on the annual valuations of the trust assets. She is eligible for a federal income tax charitable deduction of $81,305* in the year she creates and funds the trust. This deduction saves Susan $22,765 in her 28 percent tax bracket.
*Based on annual payments and a 2.4 percent charitable midterm federal rate. Deductions vary based on income earned.
Calculate Your Benefits
Submit a few details and see how a charitable remainder trust can benefit you.
Not Sure How to Begin Planning?
- Contact Sara H. Jones, J.D. at 763.381.8208 or email@example.com to talk about supporting Breck School by setting up a charitable remainder trust.
- Seek the advice of your financial or legal advisor.
- If you include Breck School in your plans, please use our legal name and federal tax ID.
Legal Name: Breck School
Address: 123 Ottawa Ave N, Golden Valley, MN 55422
Federal Tax ID Number: 41-0693894
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 examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results. Annuities are subject to regulation by the State of California. Payments under this agreement, 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.