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You can benefit from the tax savings that result from supporting the CAMC Foundation without giving up the assets that you'd like your family to receive someday with a donation in the form of a charitable lead trust.
There are two ways that charitable lead trusts make payments to the CAMC Foundation:
A charitable lead annuity trust pays a fixed amount each year to the CAMC Foundation and is more attractive when interest rates are low.
A charitable lead unitrust pays a variable amount each year based on the value of the assets in the trust. With a unitrust, if the trust's assets go up in value, for example, the payments to the CAMC Foundation go up as well.
George would like to support the CAMC Foundation and provide for his children. Following his advisor's recommendation, George funds a charitable lead annuity trust with assets valued at $2,500,000.
George's trust pays $175,000 (7 percent of the initial fair market value) to the CAMC Foundation each year for 15 years, which will total $2,625,000. After that, the balance in the trust goes to his children. Assuming a 6 percent investment return, the children will receive approximately $1,918,101.
His gift tax deduction is $2,182,775* against the $2,500,000 of assets. Therefore, only the difference ($317,225) is subject to gift tax, which is offset against his lifetime gift tax exclusion. After that, the remaining trust assets and all of their growth will pass to his family at zero additional cost in gift and estate taxes. Had George given the $2,500,000 outright to his children, it would have been a taxable gift.
*Assuming annual payments and a 2.4 percent charitable midterm federal rate.
Legal Name: CAMC Foundation, Inc. Address: 3414 Staunton Avenue, SE, Charleston, WV 25304 Federal Tax ID Number: 31-0887133
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E. Gail Pitchford, President
3414 Staunton Avenue, SE
Charleston, WV 25304
The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.
A charitable bequest is one or two sentences in your will or living trust that leave to the CAMC Foundation a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.
an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan
"I give to the CAMC Foundation, a nonprofit corporation currently located at 3414 Staunton Avenue, SE, Charleston, WV 25304, or its successor thereto, ______________* [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."
able to be changed or cancelled
A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.
cannot be changed or cancelled
tax on gifts generally paid by the person making the gift rather than the recipient
the original value of an asset, such as stock, before its appreciation or depreciation
the growth in value of an asset like stock or real estate since the original purchase
the price a willing buyer and willing seller can agree on
The person receiving the gift annuity payments.
the part of an estate left after debts, taxes and specific bequests have been paid
a written and properly witnessed legal change to a will
the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will
A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to the CAMC Foundation or other charities. You cannot direct the gifts.
An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.
Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.
Securities, real estate or any other property having a fair market value greater than its original purchase price.
Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.
A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.
You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.
You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to the CAMC Foundation as a lump sum.
You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to the CAMC Foundation as a lump sum.
A beneficiary designation clearly identifies how specific assets will be distributed after your death.
A charitable gift annuity involves a simple contract between you and the CAMC Foundation where you agree to make a gift to the CAMC Foundation and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.
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