A CHARITABLE REMAINDER TRUST (CRT) - A GIFT TO ST. CATHERINE'S AND A FIXED OR VARIABLE INCOME STREAM FOR YOU.
A CRT begins with an irrevocable transfer of cash, marketable securities, or other property to a trust. The trust sells the property and reinvests the proceeds to pay income to beneficiaries for a lifetime or a term of years, followed by transfer of the remainder to the School.
Payments from a CRT can be either variable or fixed.
- Variable Income: Charitable Remainder Unitrusts pay a set percentage (at least 5% of the annual value of trust assets). The payout changes annually with the value of trust assets, and is designed to increase over time (assuming rising values).
- Fixed Income: Charitable Remainder Annuity Trusts pay a fixed dollar annuity each year, equal to at least 5% of initial assets placed in trust.
CRTs can help you realize your goals by:
- helping St. Catherine’s School set the pace of excellence in educating girls and young women
- avoiding capital gains tax on assets put into the trust
- enhancing disposable income, especially during retirement
- diversifying asset holdings, again without loss to capital gains tax
- providing important tax benefits:
- a deduction for a substantial portion of the value of the trust property
- lower estate tax, since putting property into a CRT shrinks one’s estate.
Charitable remainder trusts can benefit you and the people in your life.
Income for Retirement: A CRT sets property aside for the School, and is a source of a lifetime income for you and your spouse (or others). Some people consider their unitrust an important part of their plans for retirement.
Income for your family: A CRT can last for a lifetime, or up to 20 years, or a lifetime followed by up to 20 years. Your CRT can provide for your lifetime, and then make payments to your children or grandchildren. Including a CRT in your will would allow your loved ones to benefit from your resources before directing them to the School.
Inheritance for your family: Another way a CRT can provide for family is to use the income payments to purchase life insurance payable to your family.
The above statements constitute general suggestions rather than legal or financial advice. Your professional advisor can help you decide how you might best remember St. Catherine’s School in your plans.
Example: Grace, age 68, puts $100,000 of highly appreciated stock into a unitrust, names a trustee, and tells the trustee to pay her 5% of the trust’s assets as revalued every year. The trust will sell the stock, pay no capital gains tax, and reinvest the proceeds. Grace’s trust payments, $5,000 the first year are designed to rise in value in future years, assuming positive investment results. In this way, Grace can stay ahead of inflation.