Mike and Sarah 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. 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.
Mike: A charitable remainder trust was the answer. We have supported the work of the Allentown Symphony for many years. We decided to make a gift of our appreciated stock to establish a charitable remainder trust. The trust sold the stock tax-free (which means we avoided paying capital gains tax), and created an income for Sarah and me for the rest of our lives. The trust will continue to invest its funds. When Sarah and I pass away, the funds in the trust will be given to the Allentown Symphony Association. In addition to all of this, we received a charitable deduction.
Sarah: I liked the fact that the trust would provide us with income for our retirement years. And if anything happened to Mike, I would still be taken care of for the rest of my life.
If you own highly appreciated property, such as real estate or stocks, you could benefit from a charitable remainder trust. The trust will help you bypass capital gains, provide you with a charitable income tax deduction in the year of the gift, and could increase your income.
If you have questions about the benefits of a charitable remainder trust, please contact us. We are happy to work with you, and answer any questions you have.