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
Ethan, 75, wants to make a gift to Morehouse but would also like more income in the future. Ethan 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.
Ethan 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 Ethan $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.
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Calculate Your Benefits
Submit a few details and see how a charitable remainder trust can benefit you.
- Contact Monique M. Dozier at 470.639.0333 or email@example.com to talk about supporting Morehouse by setting up a charitable remainder trust.
- Seek the advice of your financial or legal advisor.
- If you include Morehouse in your plans, please use our legal name and federal tax ID.
Legal Name: Morehouse College
Address: 830 Westview Drive SW, Atlanta, GA 30314
Federal Tax ID Number: 58-0566205