Thomas M. Boles, 33°, G.C.
Director of Development
Tel 562-691-4227
Fax 562-691-5327

Hi folks! I took a little vacation last month, but the store was open, and will always be open for your support of our wonderful Fraternity and its philanthropies. I have had many requests for an explanation of the various trusts that are available, so this month I’ll give you an idea as to how a Charitable Annuity Trust works.

Highly appreciated, low-yield property may be transferred into a living remainder annuity trust. The individual selects an annuity amount or a percent of the initial fair market value, which will be paid for one or two lifetimes. The annuity amount will be fixed and will not change regardless of the value of the trust principal or the return of the trust.

Tax Benefits: Major benefits of an Charitable Annuity Trust include: (1) bypass of capital gains, (2) increased income, and (3) charitable income tax deduction which reduces current income taxes. An annuity trust usually is funded with low-yield highly appreciated stocks, buildings, or land. The donor selects the income recipients, the annuity amount, and the charities to receive the trust principal after all income payments have been completed.

Trust Funding: For example, a husband might transfer into an Annuity Trust stock with a cost basis of $10,000 and a fair market value of $100,000. He could select a $5,000 annuity for himself and his spouse for life and then direct that after the death of both, the principal be distributed to their favorite charities.

Increased Income: After the transfer of the property, the trustee could sell the property and invest in a much higher yield security without payment of capital gains tax. Mother and father would receive a considerably larger income, which would in part be sheltered by a charitable deduction.

Fixed Payment: The annuity trust is very straightforward; a fixed amount is paid for the two lives of the donor and his or her spouse. It is entirely appropriate to use an annuity remainder trust if the donors are senior and feel comfortable with the fixed amount. For these persons, the comfort of knowing that their payment is not dependent upon market variations may be considerable, and the fixed payment of the annuity trust may increase their peace of mind.

This is but one of many trusts that are available, and my offer (as a volunteer) to you is to let me know what you want out of your appreciated assets, as it relates to your future, and I’ll do my very best to offer a few ideas that may help you. I’m sure there are some real advantages to you and your family. Fill out the coupon above and let us, together, look at your estate plans. Which leaves my “ad” for this month to read:
Sharing together, and planning together brings success!