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Charitable Remainder Annuity Trusts

A charitable remainder annuity trust is a separately invested and managed charitable trust that pays the donor and/or other designated beneficiaries a fixed annuity income for life, or for a term of years (as contrasted with a unitrust that pays a variable income). Like other life income arrangements, the donor receives an income tax charitable deduction for a portion of the gift. No additional gifts are permitted. After the annuity terminates, the accumulated principal or “remainder interest” goes to MCHT, for the purposes specified by the donor. A minimum gift is usually $100,000. Here are some of the advantages of such a gift:

  • Receive a stable, predictable income
  • Avoid all capital gains on any appreciated asset
  • Reduce estate tax liability

Federal law requires a minimum annuity equal to 5% of the principal, although higher rates are negotiable, based on the age(s) and gender(s) of the income beneficiaries. The income tax charitable deductions are also based on the age(s) and gender(s), as well as the annuity payout selected in discussions with MCHT.

To request a personal illustration, please contact David Warren, Planned Giving and Major Gifts Officer. All illustrations and conversations will be done on a strictly confidential basis.