Charitable Remainder Annuity Trust: The Details

A great way to make a gift, receive fixed payments, and defer or eliminate gains tax. It provides a steady cash flow and can be more beneficial than keeping an asset or selling it outright.

Is this gift right for you?

A charitable remainder annuity trust is for you if…

  • You want to make a major gift to Pomona College while retaining or increasing your income from the assets you contribute.
  • You hold appreciated stocks or bonds and want to avoid the capital gains cost of a sale.
  • You prefer the stability of a fixed income.
  • You hold tax-free bonds and want to continue to draw tax-free income from your gift plan.

A charitable remainder annuity trust is a separately invested and managed charitable trust that pays you, and/or other beneficiaries, a fixed annuity for life or for a term of years (up to 20). You receive a charitable income tax deduction for a portion of the value of the assets you place in the trust. By law no additional gifts to the trust are permitted once the trust is initially funded. After the annuity trust terminates the balance or "remainder interest" goes to Pomona College to be used as you designate.

Planning Points

With an annuity trust you can:

  • Receive stable, predictable income equal to no less than 5% of the original gift.
  • Avoid all upfront capital gains tax on any appreciated assets you contribute to the annuity trust.
  • Receive income that may be taxed favorably.
  • Reduce your estate tax liability.

Please contact us so that we can assist you through every step of the process.

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