With a charitable remainder trust you make a gift to PNB (and possibly other charities) and receive income for your lifetime (or a period of up to 20 years that you specify). You may have an asset you wish to donate to the Pacific Northwest Ballet, or you may have an asset that is underperforming and you would like to improve your cash flow from it. You may be reluctant to sell the asset and reinvest in something more productive because of substantial capital gains taxes. As an alternative, you might consider a charitable remainder trust that can be established benefiting you and, in the long run, providing support for Pacific Northwest Ballet.
You transfer assets into a trust and designate a trustee. The trustee manages the assets, which may involve selling them and reinvesting the proceeds as appropriate, and pays income to you (or other designated beneficiaries). When the trust sells appreciated assets, it pays no tax on the gains. Payments can be a fixed amount (annuity trust) providing you the security of the same payment each time; or payments can be based on a stipulated percentage of trust assets (unitrust), meaning payments will vary but have the possibility of increasing over time. When the trust terminates, the remaining principal is used to benefit Pacific Northwest Ballet. Overall, a CRT has these benefits:
(Example uses a discount rate of 3.4%.)
We would be pleased to prepare an illustration showing how a charitable remainder trust would work in your situation. There is no cost or obligation and all information will be kept confidential. For an illustration or more information, please contact Katie Johnson, Major Gift and Planned Giving Manager, at 206.441.3599 or firstname.lastname@example.org.