Charitable Remainder
Annuity Trusts
Structured similarly to a unitrust, the annuity trust pays beneficiaries a fixed income for their lifetimes or for a term of years up to 20. As with a unitrust, the donor or a financial institution may serve as trustee of an annuity trust.
Because of the costs of administering an annuity trust, Kanuga suggests a minimum gift of $100,000. Unlike a unitrust, additional contributions may not be placed in an annuity trust.
An annuity trust's primary benefits are stable, predictable income, professional portfolio management and investment diversification.
Comparison of the Benefits of a Unitrust and an Annuity Trust
Assumptions
- Beneficiaries aged 72 and 70
- 31 percent income tax bracket
- Holding $100,000 in stock with $50,000 cost basis
| Comparison of benefits | Unitrust | Annuity Trust |
| Contribution | $100,000 | $100,000 |
| Income Rate | 5 percent | 5 percent |
| First Year Income | $5,000 | $5,000 |
| Future Income | Variable | $5,000 |
| Charitable Deduction | $44,210 | $51,840 |
For information and assistance with any form of giving to Kanuga, please contact Randy Boone, Kanuga’s director of development, at 828-692-0077, ext. 240, or . Persons considering a sizeable donation to Kanuga or interested in providing for Kanuga in their estate plan should seek the advice of a financial advisor and/or attorney.
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