Charitable Remainder Trust
An Example of How it Works
Susan, 75, wants to make a gift to the Fairmont Opera House 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 $276,880* in the year she creates and funds the trust. This deduction saves Susan $88,232 in her 32 percent tax bracket.
1A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.
*Based on annual payments and a 3.2 percent charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.
Contact Blake Potthoff at 507-238-4900 or at email@example.com for additional information on bequests or to chat more about the different options for including the Fairmont Opera House in charitable remainder trust.
Seek the advice of your financial or legal advisor.
If you include the Fairmont Opera House in your plans, please use our legal name and federal tax ID.
Legal Name: Fairmont Opera House, Inc.
Address: 45 Downtown Plaza, Fairmont, MN 56031
Federal Tax ID Number: 41-1408912
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.
Looking for ways to receive reliable payments?
If you have built a sizable estate and also are looking for ways to receive reliable payments, consider a charitable remainder trust1.
These types of gifts may offer you tax benefits and the option for income. There are two ways to receive payments and each has its own benefits:
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.
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.
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