Ronald McDonald House Charities of San Diego

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Charitable Remainder Trust

If you've built a sizable estate and are looking for ways to receive reliable income payments, consider a charitable remainder trust (CRT).

CRTs may offer you tax benefits and the option for income. There are two ways to receive payments, each with its own benefits:

The annuity trust pays you each year the same dollar amount you choose at the start. Your payments stay the same, regardless of fluctuations in trust investments.

The unitrust pays you each year a variable amount, based on a fixed percentage of the fair market value of the trust assets. Your payment amount is redetermined annually. If the value of the trust increases, so do your payments. If the value decreases, your payments will as well.

An Example of How It Works

Woman hugging dogLucille, 75, wants to make a gift to the House but would also like more income in the future. Lucille creates a charitable remainder unitrust with annual lifetime payments to her equal to 5% of the fair market value of the trust assets as revalued annually. She funds the trust with assets valued at $500,000.

Lucille receives $25,000 the first year from the trust. Subsequent payment amounts vary each year depending on the annual valuations of the trust assets. She is eligible for a federal income tax charitable deduction of $290,360* in the year she creates and funds the trust. This deduction saves Lucille $92,915 in her 32% tax bracket.

*Based on a 5.2% charitable midterm federal rate. Deductions and calculations will vary depending on your personal circumstances.

See How It Works
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Next Steps

  1. Contact Christina Jordan at 858-598-2461 or cjordan@rmhcsd.org to talk about supporting the House by setting up a charitable remainder trust.
  2. Seek the advice of your financial or legal advisor.
  3. If you include the House in your plans, please use our legal name and federal tax ID.

Legal Name: Ronald McDonald House Charities of San Diego, Inc.
Address: 2929 Children's Way, San Diego, CA 92123
Federal Tax ID Number: 95-3251490

Grantor Charitable Lead Annuity Trust

Provides income payments to a qualified charitable organization for a period of years, the lives of one or more individuals or a combination of the two; after which, trust assets are paid to the donor of the trust.

A power of attorney form that transfers ownership of stock.

Securities such as stock that are in certificate (paper) form.

Investments that have increased in value since the time of their purchase.

Testamentary means bequeathed through one's will.

A charitable bequest is one or two sentences in your will or living trust that leave to Ronald McDonald House Charities of San Diego a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

I give [insert amount, percentage of the estate, or 'the rest and remainder of my estate'] to Ronald McDonald House Charities of San Diego, Inc.

Federal Tax ID #95-3251490

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor-advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to the House or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust (CRT) provides income to you, as the donor of the CRT, or to other named individuals, and does so each year for life or for a period not exceeding 20 years. The remainder of the assets go to your chosen charity.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to the House as a lump sum.

You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to the House as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and the House where you agree to make a gift to the House and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.
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