A trust is a legal entity that allows you the benefits of property while relieving you of the burdens, through the administration of a trustee. Under the terms of a charitable remainder trust, you or your designated beneficiaries receive periodic payments for life or for a term of years, after which the university will receive the remaining trust assets. In accordance with your needs, you may opt for fixed periodic payments through an annuity trust, or variable periodic payments through a unitrust. Assets such as cash, appreciated securities, or real state often provide an excellent means to fund a charitable remainder trust, and the trust agreement can be drafted to suit your particular objectives. By funding a charitable remainder trust, you will receive a calculated income tax deduction based on certain variables. You may also be able to avoid or reduce capital gains taxes and estate taxes, while making a significant and far reaching gift to CUA.
 Annuity Trust
Lana Liturgy, a Regan Hall resident in her student days, enjoyed a successful career as a human resources administrator, and saved her pennies wisely. As a long term investor, she has benefitted from tremendous appreciation in her holdings of Lazarus Lotions, Inc., a company known for restoring youth and vitality to complexions. Her initial $10,000.00 purchase has now grown to a value of $200,000.00. At 70, and in retirement, Lana would prefer stability to the volatile wings of the financial markets. By gifting her shares of Lazarus Lotions into a charitable remainder annuity trust with CUA as the remainder beneficiary, Lana will get a deduction of over $100,000.00, which can be carried over for a period of five years. She will also receive payments totaling $10,000.00 annually, in fixed amounts, for life. Finally, through this support of CUA, she will avoid the capital gains tax that would apply if she sold this highly appreciated asset.
Unitrust
Sixty year old Pedro Pew, a former CUA baseball player, moved on from the diamond to become a successful real estate developer. Over the years, he made some real estate investments for his own portfolio, including a condominium in Galilean Grove, a suburban subdivision. Having purchased the condo at $100,000.00, he had watched its value recently reach its high of $500,000.00. Pedro wondered if he could perhaps increase the income flow from one of his assets, while concurrently gaining an additional income tax deduction. He knew this may involve some openness to risk, but his aggressive streak had served him well in his many endeavors. By gifting the condo into a unitrust with CUA as the remainder beneficiary, Pedro will get a deduction of almost $200,000.00, and will receive income distributions of potentially increasing amounts, depending upon market performance, for life. In addition, he will avoid a capital gains tax on the condo's significant increase in market value. Also comforting to Pedro is the fact that he will no longer have the hassle of rental collection from unreliable tenants, and can wash his hands of any expenses connected with the contracted property manager, Pilate Properties.
(Note: Figures shown in the examples are used for demonstration purposes only, and are based upon assumptions that may not be applicable in every case. Specific amounts will differ in individual cases depending upon the size and timing of the gift, the current or applicable rates, and other relevant variables.) |
