Peter and Gail were nearing retirement. Over the years, with the help of their financial advisor, they made solid investments in securities and built a sizable portfolio. While their investments increased substantially in value, their potential capital gains tax bill was rising. Now with retirement on the horizon, they were looking for a way to sell their highly appreciated stock, generate income for their future and avoid paying high capital gains tax.
Peter: For many years, we had supported the work of our favorite ministry. Through an e-mail, we learned we could make a gift of our appreciated stock to the ministry and bypass the potential capital gains tax cost we were facing. I was thrilled to learn that, after transferring our portfolio to a Charitable Remainder Trust, the trust would sell the stock tax free.
Gail: I liked the fact that the trust would provide us with income for our retirement years. If something happened to Peter, I would still be taken care of for the remainder of my life.
Peter and Gail decided to make a gift of their appreciated stock to establish a Charitable Remainder Trust. They were thrilled at the prospect of creating future income while bypassing capital gains tax.
Peter: When I heard that, in addition to the other benefits, we would receive a charitable deduction for our gift, it was just icing on the cake! I wondered why everyone nearing retirement doesn't set up a charitable trust.
Please note: The story, names and image above represent an example of the benefits of this type of estate-planning tool. They do not represent actual donors to GFA.
You may want to click here to calculate what your benefits would be from a Charitable Remainder Trust.
GFA's charitable trusts are administered by WaterStone and can be funded with cash, securities or real estate with a minimum value of $100,000. Income payments from a charitable trust may be received quarterly or annually.