Charitable Remainder Trusts
The charitable remainder trust is a tax-wise way to receive a lifetime income and ultimately provide a generous gift for the Delgado Community College.
A charitable remainder trust is generally established with a gift of $50,000 or more, and the trust pay-out rate is usually 5% to 8%. The trust can be funded with cash, stocks, bonds, or real estate. The trust will pay out either a fixed amount (annuity trust) or a percentage of the trust income (unitrust). Upon termination of the trust, Delgado Community College will use the property remaining for the purpose you have specified.
Example: A husband and wife, both aged 65, fund a charitable remainder unitrust with $100,000 in appreciated securities that cost them $50,000 several years ago. They choose a 6% payout rate and receive a charitable deduction of $28,679. Their first year's income will be approximately $6,000. Future income will vary with the trust value. Assuming an 8% total return for the trust, the before-tax benefit to income recipients over their life expectancies is estimated to be over $192,000! After their lifetimes, the remaining principal estimated to be over $160,000 passes to Delgado Community College.
Advantages of a Charitable Remainder Trust
- You will receive income for life or a term of years (that you select).
- If you make your gift with low-yielding securities or other assets, you will increase your current income.
- If you make your gift with appreciated securities or other assets, you may avoid capital gains taxes.
- You will receive an immediate income tax charitable deduction.
- You may reduce your estate tax.
- You will have the satisfaction of supporting a Delgado Community College program important to you.
- You will be invited to join the Delgado 1921 Society for this legacy gift.