Kim Willis is 72 years old and, while he would like to make a significant gift to the Metropolitan Museum, he is concerned about providing for his 71-year-old wife. He decides he can do both, by creating a charitable remainder annuity trust from which she will receive the income during her lifetime. He takes $750,000 of appreciated securities and establishes a trust to pay 6% ($45,000) a year to his wife for her lifetime. Mr. Willis knows that if he sold the stock, the capital gains tax on the appreciation would consume a good portion of the proceeds. By establishing the trust, he ensures that his wife will enjoy income from the full $750,000 as well as be eligible to claim a federal income tax charitable deduction. Mr. Willis's greatest pleasure comes from knowing that the Metropolitan will receive the principal remaining when the trust ends—a much larger gift than he ever thought possible.
This example is for illustration purposes only. The donor is a composite and does not represent an actual contributor to the Museum. Specific updated examples can be provided on request at no obligation.