Charitable Remainder Trusts are a personal management plan that provides both a lifetime income and a charitable income tax deduction to the donor. The donor selects the payout rate, usually between 5% and 7%, which gives the donor, and perhaps the donor’s spouse or other beneficiary, an income every year for life. The higher the payout rate, the lower the charitable income tax deduction. If the trust is funded with appreciated securities, capital gains taxes are avoided. The trust may be designated to benefit a particular program at the Arizona Elk Society or it may be unrestricted.

There are two types of charitable remainder trusts: the annuity trust and the unitrust. The charitable remainder annuity trust pays a fixed, guaranteed dollar amount, regardless of the trust’s investment performance. The income rate is determined at the time the trust is funded. The annuity trust is best for donors who seek a regular, fixed income and prefer to have the satisfaction of knowing the exact amount of the payment in advance. No additional gifts may be added to an annuity trust.

The charitable remainder unitrust pays the donor a predetermined percentage of the fair market value of the trust’s assets as re-valued annually. If the trust’s assets increase the donor receives a larger payment, providing a hedge against inflation. Additional contributions may be made to a unitrust.

Charitable Lead Trusts are the reverse of charitable remainder trusts in that a stream of income is first paid to the Arizona Elk Society for a number of years (based on a term or a lifetime), after which the remainder goes back to the donor or passes to another non-charitable beneficiary designated by the donor. The stream of income that flows to Arizona Elk Society is either a fixed amount or a percentage of the value of the trust property, as revalued annually.

A charitable lead trust is a fully taxable trust; the trust pays both income and capital gains taxes, unlike the charitable remainder trust that is tax-exempt. A donor is entitled to a charitable income tax deduction if the donor continues to be taxed on the trust income.

Many donors use a charitable lead trust to reduce or eliminate the gift tax cost of transferring wealth to children or grandchildren and to give appreciated property to heirs without further gift or estate tax liability. A charitable lead trust can be established during a donor’s lifetime or by a provision in the donor’s will.

Charitable Gift Annuity is a contract between the donor and the Arizona Elk Society that provides advantages for both. Charitable gift annuities are a solid investment in the Arizona Elk Society’s future as they form a valuable part of our growing endowment. Charitable gift annuities may be funded with cash, securities or property. The minimum gift amount to create a charitable gift annuity is $25,000 or more.

The payout rate on a charitable gift annuity is based on the age of the donor at the time the gift is made. The rates are suggested by the American Council on Gift Annuities (ACGA), a volunteer organization comprised of representatives with charitable and for-profit organizations. Arizona Elk Society follows the rates suggested by the ACGA.

Summary of Financial Benefits:
• Guaranteed fixed payments for life, a portion of which is nontaxable
• Charitable income tax deduction for a portion of the gift
• Reduced capital gains taxes
• Full campaign credit
• Membership in the Legacy Society

Deferred Charitable Gift Annuity is similar to a charitable gift annuity except that the payments are deferred to a future date. A donor may defer payments to a time when income is no longer needed, such as retirement. The donor obtains a substantial charitable income tax deduction in the year the gift is made. Because payments are deferred, allowing the principal to grow, the donor enjoys a high payout rate later on.

A deferred gift annuity is an excellent way to make a gift and receive a charitable income tax deduction while providing income for the future. Like the charitable gift annuity, the minimum gift amount is $25,000.

Summary of Financial Benefits:
• Lifetime income stream – payments are fixed and a portion is nontaxable
• Charitable income tax deduction for a portion of the gift
• Reduced capital gains taxes
• Membership in the Legacy Society