Concept
- The donor gives assets to a trust and receives income for a designated period of time or until death. After that time, the remaining assets go to the Mount.
Features
The donor creates one of two types of irrevocable trusts:
- A Charitable Remainder Annuity Trust pays a fixed dollar amount, not less than 5 percent, to the donor or one or more beneficiaries, leaving the remainder to the Mount.
- A Charitable Remainder Unitrust pays a fixed percentage of 5 percent or more of the net fair market value of its assets to the donor or one or more beneficiaries, leaving the remainder to the Mount.
The trust must pay a fixed percentage or dollar amount annually for a term less than 20 years or for the life or lives of individual beneficiaries.
When payments to the individual terminate, the remainder of the trust is transferred to the Mount.
Benefits
- The donor can give a larger gift for the ultimate benefit of the Mount and still retain a lifetime income.
- With a unitrust, the donor or other individuals receive income that increases as the trust assets appreciate (although if the value depreciates, income will decrease).
- With an annuity trust, the donor is guaranteed a fixed income from the trust.
Tax Consequences
- The donor receives a current income, gift, or estate tax deduction for the present value of the charitable remainder interest.
- The donor avoids capital gains tax if the gift is made with appreciated property.
Jean Zimmerman Kotzbauer '64, Director of Development, can help you create a charitable gift plan that will fulfill your financial and philanthropic goals. Contact her at jean_kotzbauer@mail.msj.edu or by phone at (513) 244-4475 or (800) 654-9314 ext. 4475.
The College of Mount St. Joseph is not engaged in rendering legal or tax advising services. For advice and assistance in your specific case, the services of an attorney or other professional advisor should be obtained.