MAKE A GIFT TO Caltech THAT HELPS US – AND YOU!
THE BENEFITS OF THE CHARITABLE REMAINDER ANNUITY TRUST
Why make a gift to Caltech using a Charitable Remainder Annuity Trust?

You have accumulated an investment portfolio over a lifetime. It has substantially appreciated in value and worked well for you, but your financial goals are evolving. Investment management has become more complicated. You now want stable, worry-free income. If you sell the assets you'll lose much of the gain to taxes. And you also want to provide meaningful support to Caltech without impacting your current finances. Consider achieving all of your objectives with a gift to a Charitable Remainder Annuity Trust to ultimately benefit Caltech.

The benefits of establishing a Charitable Remainder Annuity Trust

A Charitable Remainder Annuity Trust will likely help you to achieve all of your goals. The trust is tax-exempt, so all investment transactions within the trust are free from taxes. What's more, no taxes are due when you transfer appreciated assets into the trust. You will receive a generous income tax charitable deduction for a portion of the value of the assets you transfer into the trust. You name the individuals who will receive payments from the trust, typically you, your spouse, or other loved ones. Payments can last for life or for up to 20 years. You also name the charities that will receive any remaining assets when the trust terminates.

In many cases, you will receive more income from the trust than you are currently getting from the assets you used to fund it.
 
How a Charitable Remainder Annuity Trust will work for you - and for Caltech
  •  A trust agreement is prepared that meets IRS requirements for the trust to be tax-exempt.
  •  You select a trustee to administer the trust. You can be the trustee, but it is customarily a bank or investment brokerage company.
  •  You name the individuals that will receive income from the trust and the charities that will receive the remaining assets when the trust terminates.
  •  You and the trustee sign the trust agreement.
  •  The trust agreement states a pay-out rate to calculate its fixed annual distributions, typically in the 5% to 6% range. The trust will distribute each year the fair market value of the assets you contribute times this pay-out rate.
  •  You transfer cash and/or appreciated assets to the trust and receive an income tax charitable deduction for a portion of the fair market value of the assets you contributed. You will not be permitted to add any assets to the trust after the initial funding.
  •  In most cases the trustee sells the assets. No capital gain taxes are due.
  •  The trustee invests the sale proceeds to enable the trust to meet income and charitable objectives.
 
 
  •  Everyone who receives annual income from the trust will get a tax reporting statement each year.
  •  The trust terminates when the last person receiving trust income passes away or its designated termination date is reached. Any remaining trust assets will be used by Caltech to further our work.
Your objectives achieved!
  •  The trustee will handle all investment and trust administrative responsibilities.
  •  You and/or others you have named will receive income from the trust, typically for life.
  •  You will have substantial tax savings.
  •  Ultimately, Caltech will benefit from your generosity.