Creative Ways to Give

Charitable Remainder Annuity Trust

A charitable remainder annuity trust ("annuity trust") is a gift plan defined by federal tax law that allows you to provide income to yourself or others for life or a term of years while making a generous gift to John Brown University.

As an annuity trust donor, you irrevocably transfer assets, usually cash or securities, to a trustee of your choice (for example, John Brown University or a bank trust department). During the trust's term, the trustee invests the trust's assets. Each year, the trustee provides a fixed dollar amount to one or more income beneficiaries named by you. The payments must be at least 5% of the trust's initial value and are made out of trust income, or trust principal if income is not adequate. Payments may be made annually, semiannually, or quarterly.

When the annuity trust term ends, the trust's principal passes to John Brown University, to be used for the purpose you designate.

Click here for a Remainder Annuity Trust calculator.

Benefits Include:

1. You will qualify for a federal income tax deduction. Note that deductions for gifts of long-term appreciated property will be limited to 30% of your adjusted gross income. Gifts of cash and non-appreciated property will be limited to 50% of your adjusted gross income. You may, if necessary, take unused deductions of this kind over the next five years, subject to the same 30% or 50% limitation.
2. If you fund the trust with an appreciated asset and the trust sells it, there will be no immediate tax on the capital gain. If you were to sell such an asset yourself, you would owe tax on the entire amount of any capital gain realized in the sale.
3. Your estate may enjoy reduced probate costs and estate taxes.
4. You will provide generous support of John Brown University.
5. Your gift will benefit from expert asset management, provided by the same professionals who manage John Brown University's endowment.