President Melody Rose was interviewed by the Lake Oswego Review about Marylhurst University's successes and opportunities for growth in January 2015.
There are two types of gifts that can benefit Marylhurst while providing you with income:
A gift annuity, one of the most popular forms of life income arrangements, offers many advantages. First and foremost, the payout rates for gift annuities are typically very attractive to people in their 70s, 80s and 90s. The rates generally range from 5 to 9 percent. If you currently are experiencing a low return on your CDs, money market accounts, Treasury notes or bond funds, a gift annuity can be a nice alternative. Creating a gift annuity through Marylhurst University allows you to obtain a higher level of income while ultimately providing financial help to the university as well. The payout rates are determined by your age, and once established, are fixed for life.
You also receive a generous income tax deduction for the year in which a gift annuity is created. Often the tax deduction is 20 to 50 percent of the amount placed into the annuity. And finally, depending on how the gift annuity is funded, you can enjoy a significant portion of the income you receive from a gift annuity on a tax-free basis.
There are many forms of gift annuities. Some offer an immediate payout option, while others allow you to fund the agreement and get an income tax deduction now, but delay the beginning of payments until some point in the future of your choosing. The proceeds that remain from the gift annuity at your passing will become an outright gift to Marylhurst University
Benefits of a gift annuity:
- Low cost
- Guaranteed, fixed income for life
- Payments guaranteed by Marylhurst University
- Income tax deduction
- Partial tax-free income
- Bypass of initial capital gains tax on the sale of appreciated assets
- Possible estate tax savings
If you are interested in learning more about gift annuities, call 503.699.6251 for a confidential illustration prepared specifically for you, which will reveal what your payout rate would be, how large your income tax deduction amount would be, and what portion of your payments would be tax-free. There is no cost or obligation to inquire!
Charitable remainder trusts can be one of the most powerful planning tools available as you do your retirement and estate planning. CRTs afford you potentially five favorable tax outcomes by virtue of one financial transaction:
- Capital gains tax avoidance allow you to place an asset(s) in a CRT and avoid paying initial capital gain tax in the process. For example, if you paid $100,000 for property that is now worth $250,000, you can sell the property through a CRT without having to report the $150,000 of capital gain as income.
- An income tax deduction is available to those who create CRTs. You can receive a significant federal and state income tax deduction based on a portion of the market value of the asset you place in a CRT.
- Tax-free compounding occurs on the asset(s) placed in a CRT. For example, if you place an appreciate piece of real estate in a CRT and then sell it, the proceeds are typically invested in stocks and bonds. Any investment growth inside the CRT will occur tax-free for as long as the trust is in existence.
- CRT income payments are taxed favorably. Often, if invested carefully, you may receive portions of your CRT income taxed at long-term capital gains rates. For many people, the long-term federal capital gain rate of 15 percent is less than their ordinary income tax bracket.
- If you have a large estate, you can eliminate estate tax. Effectively, the value of the asset placed in a CRT comes out of your estate, thereby lowering your taxable estate. As an example, if a couple has an estate valued at $10,500,000, and they place a $500,000 asset in a CRT now, the taxable value of their estate would be lowered to $10,000,000.
Finally, life insurance sometimes can be a viable part of a CRT plan. If you want your loved ones to participate in the full value of your estate, then creating a life insurance trust with some of the CRT tax savings and additional cash flow can allow your loved ones to "remain whole" as it relates to their inheritance. You may consider a CRT if:
- You want to increase your retirement income
- You own highly appreciated stock or real estate that currently provides little income
- You own a highly appreciated business
- You are considering selling any of your appreciated assets
If you have an asset that has appreciated significantly in value and you are considering selling it, call 503.699.6251 for more information and to discover whether this special trust arrangement is right for you.