Gifts That Pay You Income
The Advantages of a Charitable Remainder Trust
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If you are looking for a way to support Bates and receive retirement income with the potential for growth based on the market, consider a charitable remainder trust.
These types of gifts do offer you tax benefits and the option for income. There are two ways to receive payments and each has its own benefits:
The unitrust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. The amount of your payments is redetermined annually. If the value of the trust increases, so do your payments. If the value decreases, however, so will your payments.
The annuity trust pays you, each year, the same dollar amount you choose at the start. Your payments stay the same, regardless of fluctuations in trust investments.
How It Works
Susan, 60, wants to make a gift to Bates but would also like more income in the future. Susan creates a charitable remainder unitrust with annual lifetime payments to her equal to 5 percent of the fair market value of the trust assets as revalued annually. She funds the trust with assets valued at $250,000.
Susan receives $12,500 the first year from the trust. Subsequent payment amounts vary each year depending on the annual valuations of the trust assets. She is eligible for a federal income tax charitable deduction of $95,355* in the year she creates and funds the trust. This deduction saves Susan $26,699 in her 28 percent tax bracket.
*Based on annual payments and a 2.4 percent charitable midterm federal rate. Deductions vary based on income earned.
Calculate Your Benefits
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Not Sure How to Begin Planning?
- Contact the Office of Gift Planning at (207) 786-6246 or Toll-free: (800) 762-3145 or firstname.lastname@example.org to talk about supporting Bates by setting up a charitable remainder trust.
- Seek the advice of your financial or legal advisor.
- If you include Bates in your plans, please use our legal name and federal tax ID.
Legal Name: President and Trustees of Bates College
Address: 2 Andrews Road, Lewiston, ME 04240
Federal Tax ID Number: #01-0211781
The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.