Charitable Remainder Trust
An asset is placed into a trust and income is paid to the trustor and/or another person for lifetime or a term not in excess of 20 years. Payments must be at least 5 percent. When the trust ends, a charity receives the remainder.

Charitable Gift Annuity
Similar to a commercial annuity, with payments backed by the assets of the college. The rate of return is determined by a standard rate table, to a maximum of 11 percent for a person 90 years of age.

Charitable Lead Trust
The opposite of a charitable remainder trust. The asset produces an income to the charity for a defined period, at the end of which it is returned to the grantor or to other beneficiaries. An important use is as an estate-planning device to benefit heirs and minimize estate taxes.

Life Estate
The "give-away-your-home-and-occupy-it-for-your-lifetime" plan. You receive an immediate income tax deduction and the asset is removed from your estate.

Bequest in Will or Revocable Living Trust
The most common forms of all planned gifts, and also the most flexible and practical means of distributing one's estate. In contrast to other forms, they can be amended from time to time.

Payments from Planned Gifts
Payments from a planned gift are usually expressed as an annuity amount (fixed dollar or percentage amount, never varying) or a unitrust amount (a fixed percentage of the yearly-determined value of the trust principal). Virtually all payments from planned gifts include taxable ordinary income. In some cases, income includes capital gains, tax-free income or tax-free return of principal.

Important note on Tax Deductions

• Deductions for charitable gifts of cash are limited to 50 percent of your adjusted gross income in that year
• Deductions for charitable gifts of long-term capital gain property are limited to 30 percent of your adjusted gross income in that year
• Deductions in excess of the 50 percent or 30 percent limit may be carried forward for five additional years, subject to the same 50/30 percent limitations
• Charitable tax deductions are calculated by reference to two factors:
  
  
  • A monthly-issued "discount rate" or AFR (Applicable Federal Rate)
  • The standard mortality table as revised in 1999

These two factors determine the present value of a charitable gift that is usually equal to the amount of the immediate charitable deduction, even though the gift may not be put to use for many years. You can receive a personalized illustration for a charitable trust or annuity.