A charitable remainder annuity trust is a separately invested and managed charitable trust that pays you, and/or other beneficiaries, a fixed annuity for life or for a term of years (up to 20). You receive a charitable income tax deduction for a portion of the value of the assets you place in the trust. By law no additional gifts to the trust are permitted once the trust is initially funded. After the annuity trust terminates the balance or "remainder interest" goes to Diocese of Trenton to be used as you designate.
With an annuity trust you can:
In working with your team of professional advisors, a number of choices are available as to who would be the best trustee for you. Please contact us to discuss this further.
Typically, such a trust is invested in a balanced portfolio that is designed to produce both income and growth over the term of the trust. An annuity trust may also hold tax-free bonds.
Gifts of cash or appreciated property yield the same result for tax deduction purposes. However, gifts of appreciated property have the added value of avoiding capital gains taxes.
Your income will be taxed according to the type of investments and payout rate of the trust. You will usually pay tax at the ordinary income level on any ordinary income that is distributed, up to your full payment. The rest of your income will be taxed at the next lowest rate, usually as capital gains, then as tax-free return of principal. If you desire to know your taxation rates when you fund your life income gift, you might want to consider a charitable gift annuity or deferred gift annuity.
Yes, subject to certain limitations.
A Charitable Remainder Annuity Trust is a powerful tool that can save you income, capital gain, estate, and inheritance taxes depending on your circumstances and state of domicile. A qualified advisor is crucial to assist you in maximizing these benefits.
A charitable remainder annuity trust is for you if…