Charitable Remainder Trust
A charitable remainder trust can be designed to provide the donor or a loved one with income either for life or a designated period with the remainder going to the Museum. It is an irrevocable arrangement in which the donor transfers property to a trust and specifies how the income and principal are to be distributed during their life and at death.
There are several types of charitable trusts that can be created according to a donor’s needs and interests. These can help secure a predictable income stream or provide for the possibility of income growth. We urge anyone considering such a gift to consult with an attorney, accountant and/or financial advisor.
Gifts of Real Estate With Retained Life Interest
A gift of a remainder interest in a personal residence or farm provides the donor with a charitable deduction for the present value of the remainder interest and permits the donor to escape the potential capital gain tax on the property’s appreciation.
The donor can continue to occupy the residence or operate the farm without disruption. A donor who moves out may sell the property, dividing the proceeds with the Museum in proportion to the respective interests in the property, or make an additional outright gift of the retained interest to the Museum.
Gifts of Life Insurance
Life Insurance itself can be the direct funding medium of a gift, permitting the donor to make a substantial gift for a relatively modest outlay. This is accomplished by taking out a new policy, naming the Museum the irrevocable owner as well as the beneficiary (making the gift complete in the eyes of the IRS).
The Museum receives the premium notices and the donor makes annual donations to offset the Museum’s payments. These gifts will be tax deductible, though there is no deduction for setting up the policy itself.
If the donor does not elect to continue to make gifts to cover premium payments on the life insurance policy, the Museum may continue to pay the premiums, convert the policy to paid up insurance, or surrender the policy for its current cash value.