Charitable Remainder Trusts Flying for Hope Not for Profit Foundation
A charitable remainder trust is a separate tax-exempt account into which you transfer your gift to the Flying for Hope Not for Profit Foundation.
How It Works
In a charitable remainder trust a donor transfers assets to the Flying for Hope Not for Profit Foundation. The foundation, as trustee, then provides regular payments, based on a percentage of the trust’s principal, to the donor and/or others for life or a specified period. Later, the Flying for Hope Not for Profit Foundation receives what remains – the “charitable remainder” – of the trust assets.
Capital gains taxes on the sale of highly appreciated stock are reduced or eliminated.
-Significant income tax deduction depending on the beneficiaries’ ages and the payout rate.
-Assets are removed from the donor’s taxable estate, unless beneficiaries other than the donor and the donor’s spouse are involved.
-Lifetime payments can be double or triple the amount of dividends paid by the stock used to make the gift.
A portion of this income can be directed to pay for life insurance on the lives of the donors.
This life insurance policy may be structured in an irrevocable life insurance trust with the named beneficiaries the children of the donors. At the death of the donors the children named as beneficiaries will receive the death benefit outside of their estate “tax free” as a “wealth replacement” trust replacing the value of the original gift to Flying for Hope Not for Profit Foundation.
-Gifts of real estate can eliminate management headaches and reduce tax liabilities.
An annuity is used to fund the trust and make income payments to the donors.
- The donor received tax credits.
- The Foundation receives assets (immediate and deferred).
- The donor receives lifetime income.
- The donor’s beneficiaries receive the full value of the original gift returned to them at the donor’s death “tax free” from the irrevocable life insurance trust.