Charitable Annuities & Trusts - Princeton Theological Seminary

Charitable Gift Annuity

A simple contract whereby you make a gift of assets in exchange for a fixed income for life.

A gift that provides income

A charitable gift annuity can provide support for Princeton Theological Seminary and income for you. A charitable gift annuity is established through a simple contract and an irrevocable gift of assets in exchange for a fixed amount of income to you (or whomever you designate) for life or for a set term. After the lifetime of the annuitant, the remainder is distributed to Princeton Theological Seminary.

Benefits for you:

Income: Payments are distributed for life or a fixed period to you or to whomever you designate.
Income payment taxation: Your annuity payments may be treated as part ordinary income, part capital gains income, and part tax-free for your estimated life expectancy.
Immediate tax deduction: Your initial gift may be eligible for a tax deduction the year the annuity is established and any unused deductions may be used over the next four years as long as you itemize and maximize your available deductions each year.
Capital gains: You may avoid some capital gains tax when using appreciated securities.
Your generous gift: After the lifetime(s) of annuitant(s), the remaining value is distributed as your generous gift.

Charitable Remainder Trust

An irrevocable gift of assets into a charitable trust that provides you a fixed or variable income for life or for a set term.

A gift that can provide income and more

A charitable remainder trust begins with an irrevocable gift of assets into a charitable trust that provides you a fixed or variable income for life or for a set term. At the trust’s termination, the trust assets become a generous gift to Princeton Theological Seminary.

Types of Charitable Remainder Trusts:

Unitrust: The unitrust’s income varies on an annual basis. At the establishment of the trust, a reasonable and permissible income percentage rates is determined. Annually, the trust assets are valued, and the established rate is applied to the annual value in order to determine your income. As the trust assets increase or decrease, your income increases or decreases as well. It may be possible to make additional contributions to the trust.
Annuity Trust: The income is predictable and fixed. When you establish the trust, you set a reasonable and permissible fixed annual income based on a percentage of at least 5% of the initial market value of the trust’s assets. Even as the value of the trust fluctuates, your income remains the same – except in the very unlikely and uncommon event that the trust assets are exhausted. Additional contributions to the trust are not permitted.

Benefits for you:

Income: Payments are distributed for life or a fixed period to you or to whomever you designate.
Tax deductions: You may be eligible for a tax deduction the year the trust is established.
Capital gains: You may avoid up front capital gains tax.
Estate tax: Trust assets are not a part of your estate.

Next Steps

Charitable Lead Trust

Distribute funds to our organization for multiple years before passing them on to your loved ones at little or no tax.

Establish and fund a trust to provide a substantial recurring annual income to Princeton Theological Seminary for a set period of years, and then return the trust assets to your family in the future with little or no tax liability..

Your Charitable Lead Trust (CLT) pays Princeton Theological Seminary an interest income annually for a pre-set number of years or for your lifetime, after which the assets return to the beneficiaries that you name.

By transferring assets to a CLT it may be effectively removed from your estate and passed to your heirs with little or no tax liability. A gift tax discount arises because of the charitable interest preceding your heir’s interest.

There are two types of lead trusts: a CLT unitrust pays a fixed amount to Princeton Theological Seminary, or a CLT annuity trust pays a fixed percentage of the trust’s value determined annually to Princeton Theological Seminary.

If you structure your CLT to return assets to you (not your heirs), you may obtain an income tax deduction for the charitable interest.

Benefits for you:

Significant multi-year support for Princeton Theological Seminary
Pass the CLT assets to heirs at a future date
Maximizes value to heirs by removing the CLT assets from estate tax exposure
Further maximizes value to heirs by potentially removing the CLT assets from exposure to gift taxes