Charitable Remainder Trusts
Looking for a way to give The Adath Foundation a significant gift? If you have built up a sizeable estate and are also looking for ways to receive reliable payments, you may want to check out the advantages of setting up a charitable remainder trust.
Benefits of a charitable remainder trust include:
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.
Benefits of a charitable remainder trust include:
- Potential for a partial charitable income tax deduction
- Potential for increased income
- 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.
Potential Scenario
Susan, 75, wants to make a gift to The Adath Foundation but would also like more income in the future. Susan creates a charitable remainder unitrust with annual lifetime payments to her equal to 5% of the fair market value of the trust assets as revalued annually. She funds the trust with assets valued at $500,000.
Susan receives $25,000 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 $299,845* in the year she creates and funds the trust. This deduction saves Susan $95,950 in her 32% tax bracket.
*Based on a 1.2% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.
Learn How To Fund It
You can create an endowed gift using the following assets:
Cash
Appreciated Securities
Tangible Personal Property
Real Estate
Closely Held Stock
Retirement Plan Assets
Next Steps
|
Step 1 Contact Talor Blustin at 952.545.2424 or talorb@adath.net for additional information on bequests or to chat more about the different options for including The Adath Foundation in your will or estate plan. |
Step 2 Seek the advice of your financial or legal advisor. |
Step 3 If you include The Adath Foundation in your plans, please use our legal name and Federal Tax ID. Legal Name: The Adath Jeshurun Foundation Address: 10500 Hillside Lane West Minnetonka, MN 55305 Federal Tax ID Number: #36-3529809 |
Information contained herein was accurate at the time of posting. 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.