1.  Gifts with Retained Life Income

The donor may wish to make a substantial capital gift to Arch but feel that he or she cannot afford to give up the annual income produced by the property. Arch offers the following ways to make such a gift while retaining an income for life.

The benefits vary, but all arrangements have the following attractive features:

• Satisfaction of providing for the University's future.

• Income for life paid to the donor and/or another beneficiary such as a spouse or another family member.

• An income tax charitable contribution deduction for the portion of the transfer that represents the gift to Arch.

• Elimination or deferral of some or all capital gains tax if the gift is in the form of securities or real estate that has appreciated in value.

• Potential for increased income.

• Assets are professionally managed for the donor.

• Reduction or elimination of estate and inheritance taxes.

A. Pooled Income Funds

At this time there is not a pooled income fund. TOP

C. Charitable Gift Annuity

A charitable gift annuity is a contract between a donor and Arch. The donor transfers cash or securities to Arch in exchange for quarterly payments in the form of a guaranteed fixed annuity to the donor, another designated beneficiary, or both. Although there is no age minimum for establishing an annuity, the amount the donor or beneficiary receives is determined by the age of the beneficiary and the amount of the gift using Uniform Rate Tables from the American Council on Gift Annuities as a guideline.

To ensure that the donor fulfills his or her desire to benefit the University, the maximum rate of return on the annuities will be the annual rate according to the American Council on Gift Annuities guidelines.

A minimum contribution of $10,000 is required to fund a charitable gift annuity. When the annuity matures, the principal reverts to Arch and may be designated to benefit a specific area. The regulation of gift annuities varies from state to state. For this reason, the gift annuities described here may not be available in all states. TOP

D. Charitable Remainder Trusts

The charitable remainder trust is similar to other types of trusts except that it has a charitable beneficiary. A donor transfers property irrevocably to a trust and specifies how trust income and principal are to be distributed. The trust may be created to become effective during life or at death. A minimum gift of $100,000 is required by ARCH for Charitable Trusts. TOP

1. Charitable Remainder Unitrust ("CRUT")

    The primary feature of the unitrust is that it provides for payment to the income beneficiary in an amount that may vary. The payment must equal a fixed percentage of the new fair market value of the trust assets valued annually. The donor determines the fixed percentage upon creation of the unitrust.

    The unitrust payment must be made annually or at more frequent intervals to the donor and/or another beneficiary for life. Or, the unitrust may be set up for a term of years not exceeding 20.

    The donor is allowed an income tax charitable contribution deduction equal to the present value of Arch's remainder interest in the unitrust that is determined by reference to Treasury Regulations. The deduction is based on the fair market value of the asset transferred, the payout rate chosen, and the age and number of beneficiaries.

    The unitrust can be funded with cash or - ideally - with long term, highly appreciated capital gain securities or real estate. TOP

2. Charitable Remainder Annuity Trust ("CRAT")

    The annuity trust shares many common features with the unitrust with the following exceptions:

    The annuity trust provides for fixed income payments that may not be less than 5% of the initial fair market value of the gift in trust, and additional contributions are not permitted. TOP

3. Charitable Lead Trust

    This trust is the reverse of a Charitable Remainder Trust in that the income generated from assets placed in trust is paid to Arch for a period of years, after which time the property either returns to the donor or is transferred to a named beneficiary or beneficiaries (typically, children or grandchildren). By establishing such a trust the donor is, in effect, "lending" the asset to Arch for the term of the trust and in doing so may obtain substantial tax benefits. TOP

1. Gifts with Retained Life Income | 2. Estate Gifts | 3. Insurance | 4. Revocable Trusts