The Advantages of a Charitable Remainder Trust
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A charitable remainder trust (CRT) is a life-income gift that allows you to have an income stream during your lifetime and provide for Colorado State University later. A CRT may also generate a significant current federal tax income deduction. The added flexibility of rate and payment options not offered through other gift methods may make a CRT an excellent way to gift appreciated stock or property; because the trust is tax exempt and does not pay capital gains when assets are sold. There are two types of charitable remainder trusts and each has its own benefits:
The charitable remainder unitrust (CRUT) pays you a variable dollar amount based on a fixed percentage of the fair market value of the trust assets. The amount of your payments are based on the value of the trust assets and redetermined annually.
The charitable remainder annuity trust (CRAT) pays you a fixed dollar amount throughout the term(s) of the trust. Your payments stay the same, regardless of investment fluctuations.
An Example of
How it Works
Susan, 60, wants to make a gift to CSU but would also like more income in the future. Susan creates a charitable remainder unitrust with annual lifetime payments to her equal to 6 percent of the fair market value of the trust assets as revalued annually. She funds the trust with assets valued at $500,000.
Susan receives $30,000 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 $275,725* in the year she creates and funds the trust. This deduction saves Susan $88,232 in her 32 percent tax bracket.
*Based on annual payments and a 2.4 percent charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.
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- Complete the Statement of Intent form to let us know of your gift intentions and to ensure peace of mind that your gift will have the desired impact at CSU.
- Contact the Office of Gift Planning at email@example.com or (970) 491-3414 for additional information.
- Seek the advice of your financial or legal advisor.
- When including CSU in your plans, please use our legal name and federal tax ID.
Legal Name: Colorado State University Foundation
Location: PO Box 1870, Fort Collins, CO 80522
Federal Tax ID Number: 23-7098397
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.