Gift Range: $100,000 or more
The annuity trust provides for payment of a fixed-dollar amount—annually or at more frequent intervals—to the designated beneficiary(ies).
The amount must equal at least 5% of the initial fair-market value of the trust. At the death of the last beneficiary, the trust principal is distributed to the Lewis County Historical Society.
In addition to the income you will receive from the trust, you will also be entitled to a charitable income-tax deduction for the value of our remainder interest in the trust assets.
The trust requires a trustee, which can be your attorney, your financial advisor or you bank, among others.
Example: John and Mary purchased growth stock for $20,000 ten years ago. It is now valued at $100,000, but the annual dividends are only $1,500. They are both 75, and they would like to increase their retirement income. To do this, they transfer the stock to a charitable remainder annuity trust with a payout rate of $5,000 per year.
In the first year, they will receive a $5,000 payment—over three times the dividends they have been receiving—and they will continue to receive $5,000 each year for the rest of their lives. Moreover, they avoid tax on their profit in the stock and receive an income-tax deduction of about $37,000. In their 24% tax bracket, this saves them $8,880 in income taxes (24% of $37,000).
When the last beneficiary dies, the annuity trust assets will benefit the Lewis County Historical Society.
How It Works
- Create trust agreement stating terms of the trust; transfer cash or other property to trustee
- Trustee invests and manages trust assets and makes fixed payments to income beneficiaries you designate
- Remainder goes to the Lewis County Historical Society for purposes you specify
- Payments to one or more beneficiaries that remain fixed for the life of the trust
- Federal income-tax deduction for the charitable remainder value of your interest
- No capital-gain tax when trust property is sold
Trust remainder will provide generous support for the Lewis County Historical Society