CHARITABLE REMAINDER ANNUNITY TRUSTS
A Charitable Remainder Annuity Trust provides a way to avoid fluctuations in interest rates and ensures that you or someone you designate receives a fixed income for life. The trust may be established with a gift of cash, appreciated securities or property either during your lifetime or through your will.
This trust agreement locks in a long-term annuity rate and you or your designated beneficiaries receive regular annuity payments for life, or joint lives, or for a term of up to 20 years. The rate chosen depends on prevailing market conditions.
Ultimately, the remainder in the trust becomes the property of the Dallas Jewish Community Foundation and is used to meet the community’s most critical needs, or to support organizations or causes that you specify.
Should you elect to use appreciated property to fund the trust, you will avoid any initial income tax on the capital gain. The contributed property is received by the trust at its fair market value, and the annuity rate is multiplied by this value to calculate the payments to the income beneficiaries. In addition, you will be entitled to a current charitable income tax deduction based on the present value of the anticipated remainder—which will ultimately be paid to the Jewish community.
AN EXAMPLE
You decide to contribute stock worth $20,000, which cost you $5,000, to a Charitable Remainder Annuity Trust. The trust then disposes of the stock and reinvests the proceeds. The trust is credited with the full value of the stock, and neither you nor the trust is charged initially for payments of income tax on the capital gain. The trust provides income at a fixed rated of, for example, 7%, guaranteeing payments of $1,400 per year ($20,000 x 7%).
Establishing a Charitable Remainder Annuity Trust with the Dallas Jewish Community Foundation today will allow you to be there for your family, your community, and the Jewish people—when and where and whenever help is needed in the future.
AT-A-GLANCE
Provides a fixed lifetime annuity at a favorable rate
Eliminates initial tax on capital gain for contributed appreciated property
Provides a current income tax charitable deduction
Avoids estate taxes on contributed assets
Enables you to make a significant contribution to the community