Does Your Home Need
A New Home?

Build Retirement Income in a
Charitable Remainder Trust: 
Take Less, Receive More

Your home has anchored your family's life for many years.  It has been a haven, making you feel secure.  It has been the scene of many happy times with family and friends - and now it is more than you need.

Often people embark on a new lifestyle, and their grown children are not interested in taking over the family homestead.  Sometimes a move to a different climate or a retirement community is pending.  But you can still derive further benefit from your home.

Turn Your Home Into a Charitable Gift
That Also Benefits You

You can use your home to create income, save taxes, reduce probate costs for your estate and serve a charitable purpose.  By transferring your unoccupied home to a net income with make-up provision unitrust,   naming Catholic Diocese of Pueblo as the recipient of the remainder interest, you will:

• make a significant gift which we can access after your lifetime;

• avoid up-front capital gains tax on the increase in the property's value since you bought it;

• receive an immediate income tax deduction for the value of the remainder interest;

• receive an income for the trust for the rest of your life;

• reduce probate costs by eliminating the property from your probate estate;

• relieve yourself of selling the property taxes.

This special type of unitrust can be invested to produce income later in retirement or now, if you want payments to begin soon.  Contact us to learn more 719 544-9861 ext. 131.

Like many other 42 - tp 60 - year-olds, you may be focused on acquiring all the assets you can.  You and fellow baby boomers know you will need income-generating property when you retire.  Many of these assets are in highly appreciated growth securities or real estate currently producing little or no income.  The questions baby boomers ponder are how and when to reinvest them.

Actually, a charitable remainder unitrust with the lowest payout rate is a trust with a strong likelihood of an ever-increasing income, an ideal vehicle for generating higher retirement income when it is needed most.  That is because this trust pays a variable amount each year based on the value of the trust assets.  As the assets increase or decrease, so does the income.

That is why the selection of a qualified trustee with a history of solid trust investment management is so important.  Oftentimes, charitable trusts, when handled by experienced managers, grow very well.

An Example

Let's use an example to clarify.

John Morgan, aged 53, owns, among his other assets, $500,000 worth of growth stock he acquired 15 years ago for $50,000.  It pays him 2 percent income per year.  He transfers that stock to a 5 percent charitable remainder unitrust.  He accomplishes the following:

• Irrevocably assigns the principal, after his life, to his favorite charitable organization

• Qualifies for a federal income tax deduction of approximately $157,055 (based on quarterly payments and a 4.6 percent charitable midterm federal rate)

• Receives income - in quarterly installments for life - that begins a t$25,000 per year the first year and varies as the trust principal varies

• Makes the entire $500,000 available for reinvestment inside the trust, totally free of capital gains tax.  If John were to sell and reinvest the property himself, he would owe tax on the $450,000 capital gain.

• Creates reduced probate costs and estate taxes.

A Look at the Benefits

Using this formula, the charitable remainder unitrust becomes extremely beneficial for John's retirement future.  Actually, over his 30-year life expectancy, given our assumptions, John will have received $1,014,202 before taxes. 

All of these benefits occur only because John has assigned the principal of the trust, after his life, to his favorite charitable organization.  If he lives out his life expectancy, given our assumptions, his chosen organization will receive $905,681!

Ask us to calculate the benefits you and your spouse can receive from a charitable trust.  Then act, for yourselves - and your favorite cause.  719 544-9861 ext. 131.

The Spirit of Philanthropy
A Gift to Satisfy Three Wishes

A short conversation with Mary Watson quickly reveals her passions - her family, especially her four grandchildren, and her community.  Recently, Mary learned how to help those closest to her, while also fulfilling a personal financial objective.

Several years ago, Mary and her late husband bought a farm a short distance from their hometown.  They enjoyed spending part of their summers there and taking their children, and later their grandchildren, to the country to experience nature.  After her husband passed away, Mary began spending more time on the farm and eventually lived there most of the year.

With rapid growth in her hometown and subsequent development outside city limits, the value in Mary's farm had risen tremendously over the years.  "I found myself with an asset worth several hundred thousand dollars, yet with little cash in the bank," Mary explains.  If she sold the farm, capital gains taxes would have been substantial, so Mary looked for an alternative.

Mary learned from her advisor that she could transfer the farm into a charitable remainder trust, avoid hefty up-front capital gains taxes and receive an income for life.  This solution would allow her the cash to fund her grandchildren's college education and eventually benefit charitable causes close to her heart.

"Another personal benefit of this arrangement is that it allowed me the chance to speak with my family about my estate and my wishes for the future,"  Mary adds, "Nothing means more to me than showing my loved ones the value in helping others."