Overview

    Donate

 » Individual Giving

•  • Individual Giving
•  • Benefits
•  • Other Ways to Give

 » Corporate Giving

•  • Corporate Giving
•  • Sponsorship Opportunities
•  • Current Sponsors

    Endowment

 » Planned Giving

•  • Planned Giving
•  • Bequests
•  • Charitable Gift Annuity
•  • Charitable Trust
•  • Other Gift Types
•  • Inquiry Form

 » Special Events

•  • Special Events
•  • Special Events for Carmen
•  • 2008 Austin Lyric Opera Ball

    Contact

planned giving

charitable trust

You may have an asset you wish to donate to the Austin Lyric Opera Endowment Fund, 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.

A charitable remainder trust can be established to benefit you and, in the long run, provide support for Austin Lyric Opera's future.

You transfer the assets into a trust and designate a trustee. The trustee manages the assets and pays income to you (or other designated beneficiaries). 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), providing you with possibility that payments may increase.

When the trust terminates, the remaining principal is left to benefit Austin Lyric Opera.

You will receive an income-tax deduction for the present value of the projected remainder of the trust that will go to Austin Lyric Opera, and you avoid capital gains taxes when appreciated assets are transferred to the trust.

Another option, a charitable lead trust, is essentially the opposite of a charitable remainder trust. Instead of a beneficiary receiving payments, Austin Lyric Opera would receive the payments. When the trust terminates, the principal is then distributed among non-charity beneficiaries.

Charitable Trust Example

Mr. and Mrs. Smith, ages 68 and 65, own $250,000 in stock that they bought in 1975 for $50,000. Instead of selling it and reinvesting the after-tax proceeds of $210,000, they contribute the stock to a charitable remainder unitrust with a payout rate of 6% for their lifetimes and receive an income-tax deduction of $77,980. The trustee sells the stock (paying no tax on the gain), reinvests the proceeds, and earns a net total return of 8%. The trust pays Nan and Bob $15,000 (6% of $250,000) in its first full year. If the trust principal continues to grow by 2%, the payments will increase each year.