Charitable Remainder Trusts
How It Works
Here’s how you set up a remainder trust:
- Irrevocably transfer assets to a trustee.
- That trustee makes annual payments to you and/or other beneficiaries.
- At the end of the trust term, the assets remaining in the trust are given to Angelo State University for a purpose of your choosing.
When you establish a charitable remainder trust, you and the trustee agree to the amount of the annual payment to you and/or other beneficiaries. The amount of the annual payment must be at least 5 percent of the trust assets’ initial fair market value and is generally taxable to the beneficiaries.
Here are a few reasons why this type of gift to Angelo State might be ideal for you:
- Receive annual payments.
- Pay no immediate capital gains tax on the transfer of appreciated assets.
- Receive federal (and possible state) income tax charitable deduction.
- Reduce or eliminate estate taxes.
Who It’s Ideal For
A charitable remainder trust might be your preferred method of giving to Angelo State if you:
- Want to receive annual payments for life
- Have assets that you are able to give away.
- Have a large part of your portfolio in one company and want to diversify your investments
- Want to reduce your current income taxes with an income tax charitable deduction
Assets that work especially well include:
- Cash or funds earning low interest rates
- Appreciated securities
- Real property
- Oil and gas interests