What is a charitable remainder annuity trust?
1. Request a personalized illustration for your client using our request form, or email a Gift Planner. To create a customized illustration for your client, Thrivent Charitable requires the following information:
- Client's name, birthdate, and tax bracket; and,
- Proposed gift amount, including cost basis
2. Thrivent Charitable sends you an illustration packet to review with your client.
3. If your client wishes to proceed and establish an annuity trust, complete and return the charitable remainder trust application, IRS Form W-9, and fund workbook included in the illustration packet.
- If the client is giving cash, please do not send any money at this time.
- If the client wishes to give stock, include copies of either the stock certificates or the most recent brokerage statement. Thrivent Charitable will contact you with specific instructions on how to transfer the stock.
- Clients who want fixed income for set term-of-years, rather than life.
- Older clients (70+) seeking a fixed income stream.
- Fiscally conservative clients interested in converting an existing asset into an ongoing stream of income.
- Clients who wish to give appreciated stock and bypass associated gains.
- Clients who have maxed out qualified retirement plan contributions, but still need additional retirement income.
- Clients with stock who are seeking ongoing income for long-term care or wealth replacement insurance premiums.
- The trust beneficiary receives fixed payments for life, or for a fixed term of years.
- The donor receives a charitable income tax deduction in the year of the gift.
- For gifts of cash, the annual deduction limit is 60% of the donor’s AGI (for gifts January 1, 2018, and thereafter).
- For gifts of long-term appreciated securities, the annual deduction limit is 30% of the donor’s AGI.
- Unused charitable deductions may be carried over an additional 5 years.
- The annuity trust sells appreciated assets tax-free – the proceeds are reinvested to produce income.
- The gift minimum is $50,000. While additional gifts are not permitted to the trust, the donor may create another trust to receive an additional income stream.
Thrivent Charitable will support you with a full range of charitable products and services, and you'll be compensated for your efforts by Thrivent or American Funds.
Annuity trust payout rate
In determining a payout rate, Thrivent Charitable looks to various factors, including the current economy, the prevailing IRS discount rate, and the age of the trust income beneficiaries. Once the percentage has been set in the signed trust document, it cannot be changed. In the event of an extended downturn in the investment markets, it’s possible a trust with a higher trust payout rate may exhaust the trust principal prior to the expected termination of the trust. Payments are not guaranteed beyond the exhaustion of the trust’s assets.
Payments can be paid to the donor, a relative or friend, and are taxable as income. There may be a gift/estate tax consequences if someone other than the donor or the donor’s spouse is named as an income recipient.
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Our team of charitable gift planners utilizes deep charitable expertise to expand your clients' options and help meet their giving goals. Our collaborative approach will allow you to maintain your current client relationships while we provide the most relevant advice that aligns with your clients' financial priorities.
From left to right: Cindy Aegerter, Ben Boline, Nikki Johnson, Greg Shamey