CHARITABLE LEAD TRUSTS
A charitable lead trust is an irrevocable trust designed to provide financial support (fixed or variable) to the Trolley Museum for a specific period of time, while the principal assets are retained for and go to family members or other beneficiaries after the fixed term, with estate or gift taxes usually reduced or even eliminated. A charitable lead trust enables you to efficiently transfer assets to family members, reduce tax liability, and make a significant charitable impact. Charitable trusts are subject to specific IRS rules, so we recommend that you work closely with your legal, financial, and tax advisors.
- Fund the trust during your lifetime or through your will.
- Support the Trolley Museum’s mission through annual income payouts.
- Reduce your taxable estate and potential gift taxes.
- Keep assets in the family.
CHARITABLE REMAINDER UNITRUST
A charitable remainder unitrust is like a combination of a gift and an investment plan. You place assets in trust, and you (and/or another beneficiary) receive lifetime income from them. After your passing, the Pennsylvania Trolley Museum receives the remaining principal. With a charitable remainder unitrust, the amount you receive as income varies each year and is a set percentage of the value of trust assets, predetermined annually. Charitable trusts are subject to specific IRS rules so please work closely with your legal, financial, and tax advisors.
- Receive lifetime variable or fixed income (often greater than the yield on contributed assets).
- Obtain a sizable income tax charitable deduction.
- Immediate income charitable tax deduction and possible future tax savings.
- Eliminate up-front capital gains tax if you donate long-term appreciated securities.
CHARITABLE GIFT ANNUITY
If you want to donate to the Pennsylvania Trolley Museum but are concerned how it might affect your income in retirement, you may want to consider setting up a charitable gift annuity. A charitable gift annuity may be a good option if you want an immediate charitable deduction and want to secure a source of lifetime income for yourself and another beneficiary. It is a good option if you want to eliminate potential capital gains tax and support the Museum with a significant donation.
A charitable gift annuity is a contract between you and the Museum in which you make a gift and, in exchange, the Pennsylvania Trolley Museum assumes a legal obligation to provide you and up to one additional beneficiary with a fixed amount of monthly income that continues until the last beneficiary passes. Part of your gift may be used by the Museum immediately for charitable purposes, and part of the gift is set aside in a reserve account to be invested to support your future income payments.
You can fund a charitable gift annuity with an irrevocable gift of cash, publicly traded securities, or other assets. Your support may provide an immediate partial tax deduction. The exact amount of your deduction will be based on the number of beneficiaries, their ages at the time of the gift, life expectancies, and anticipated income stream they will receive from the annuity. Donating appreciated securities rather than cash to a charitable gift annuity may help reduce your capital gains liability while securing a future income stream.
To make sure your will accomplishes your goals according to your wishes, we recommend you obtain professional legal, tax, and/or financial counsel who specialize in charitable gift annuities.
- Secure a source of lifetime income.
- Obtain a partial charitable deduction.
- Increase your income from a low-yield asset.
- Eliminate up-front capital gains tax on long-term appreciated assets used to fund the trust.