Charitable Remainder Annuity Trusts

How Does It Work?

You can establish a charitable remainder annuity trust by irrevocably transferring assets to a trustee, who then makes fixed annual payments to you and/or other beneficiaries. At the end of the trust term, the assets remaining in the trust are distributed to California Western for the purpose you designate.

When you establish a charitable remainder annuity 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.

This type of trust may appeal to older beneficiaries who appreciate knowing exactly how much they will receive each year and are not as concerned about the effects of inflation over time.

Benefits

• Receive fixed annual payments.
• Pay no immediate capital gains tax on the transfer of appreciated assets.
• Federal, and possible state, income tax charitable deduction.
• Reduce or eliminate estate taxes.
• Make a gift to California Western.

This Might Interest You If…

You want to make a gift to California Western and you:

• Want to receive fixed annual payments for life.
• Have assets that you are able to give away. Assets that work especially well include:
  • Cash or funds earning low interest rates.
  • Appreciated securities.
• Have a large part of your portfolio in one company and want to diversify your investments.
• Want to reduce your current income with a charitable deduction.

Assets used: Usually cash or appreciated securities.