An Excellent Way to Reduce Taxes

Have you ever heard the phrase, "giving away the tree while keeping the fruit"?

In the world of philanthropy, this is how we refer to a charitable remainder trust. It's a plan that promises you a life income (you keep the fruit) from assets you irrevocably put in trust now (give away the tree) for the future needs of your favorite charitable organizations.

The Tax Benefits
Look at the advantages of a charitable remainder trust:

• An immediate federal income tax deduction.
• No up-front capital gains tax when you give appreciated securities or property.
• You can save on estate taxes typically without paying a gift tax, either.
• You can actually increase your income depending on the yield.

How the Plan Works
You decide how much you'd like to put into the trust, the amount of income you'd like to receive from the donated assets and whether you want fixed or variable payments.

This last choice introduces the two basic charitable remainder trusts:

• The annuity trust, which pays you, year after year, the same dollar amount you choose at the start, regardless of fluctuations in trust investments.
  
• The unitrust, which pays you a variable amount each year based on a fixed percentage of the fair market value of the trust assets, re-determined annually (allowing your income to possibly increase and keep up with inflation, or possibly decrease).

After your lifetime, the trust income can, if you wish, continue for someone else's lifetime benefit (perhaps your spouse or another person) before the remaining principal is given to charitable nonprofits.

Enjoy the Fruits of Your Benevolence
Besides your own financial security, your greatest reward is the enduring satisfaction of a major commitment to charitable nonprofits.

Please contact Mary Ludwig, Development Director at 712-732-5127, for more information.

The information on this site is not intended as legal, tax or investment advice. For such advice, please consult an attorney, tax professional or investment professional.

Copyright © The Stelter Company, All Right Reserved.

Essentials

Ways to Give

What to Give

Reading Room

Glossary of Terms

Q&A

Goals & Gifts

Bequest Language