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CHARITABLE REMAINDER TRUST
What is a Charitable Remainder Trust?
Trusts have been used to manage property since ancient Rome. It's main purpose is to help transfer property (cash, stocks, real estate, etc.) to multiple interests with a variety of objectives. Documents are drafted by your attorney and accountant to ensure the proper procedure is followed and your desires are properly met.
What Does It Accomplish?
1. A Charitable Remainder Trust addresses the present and future needs of the Hasting Catholic Schools.
2. It may provide income for one or more individuals for a certain period or for twenty years.
3. It provides an immediate income tax deduction for the donor. The value is determined by the charitable amount passing to the trust.
4. Donor's estates are reduced saving estate taxes and the probate cost attached to it.
5. Trusts may enjoy professional management of assets generally improving future income received.
How Does A Charitable Remainder Trust Work For You?
By transferring property (cash, stocks, real estate, etc.) to the St. Cecilia High School Endowment Fund, The Hastings Catholic Schools Trust, St. Cecilia's Church, or St. Michael's Church, a charitable trust can be created where payments from the trust can be made to you and/or one or more other persons for life (20 years). Thx benefits vary depending on the type of asset given. Generally the given property has grown substantially in value and the donor seeks the security of a fixed payment.
Please consult with your tax advisor and attorney to make your wishes known. They will provide you with the additional, personal information. The Hastings Catholic School Development Office is likewise here to serve your needs with additional personal, professional services.
EXAMPLE A:
Mr. S. T Mikel, 67, has accumulated a sizable estate while working for the U.R.&A. Railroad. This goodly sum has assured him of a comfortable living for as long as he remains alive.
Mr. Mikel has two concerns in mind. First, he appreciates the fact that he has virtually no financial worries at this point in his life due to his excellent retirement planning. He fears that his children, ages 35, 37 and 41, may not be afforded the same opportunity. He wants to ensure their retirement years are free from financially anxiety.
In addition, Mr. Mikel graduated from St. Cecilia High School and he would like to see the principles that he was taught be preserved for those who follow. He recognizes the importance of good, qualified teachers and wishes to help in some fashion.
He decides to establish a charitable remainder trust with a portion of his estate. Earnings could be used to finance investments for his children for as long as he is living. Because this portion will be used for charitable purposes in the future, substantial deductions are allowed in the year that the gift is made. Estate taxes are likewise avoided to the extent of the gift.
Mr. Mikel assures his children of the substantial start toward retirement and the Hastings Catholic Schools of a sizable addition to their Endowment Fund.
Mrs. Inez M. Iverson is planning to retire. She owns a number of stocks that she has acquired over the years which have increased in value but really provide little annual income.
Selling these stocks means a capital gains tax on the entire value increase. This means that she will have less to reinvest in a diversified manner in order to gain more income.
Mrs. Iverson decided to establish a charitable remainder trust to the Hastings Catholic Schools in the amount of $100,000. The trust will now sell the stock, pay no capital gains tax, and reinvest all of the stock proceeds in a manner that yields the same necessary to provide Mrs. Iverson with the amount of income desired.
The possibility now exists that she may receive more income for life than she would if she sold and reinvested the remainder on her own. And, just as important, she has been able to help the institution that has meant a great deal to her and her children.
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HASTINGS CATHOLIC SCHOOLS |
