You may have an asset you wish to donate to the Seattle Opera Endowment, 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 Seattle 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 Seattle Opera.
You will receive an income-tax deduction for the present value of the projected remainder of the trust that will go to Seattle 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, Seattle Opera would receive the payments. When the trust terminates, the principal is then distributed among non-charity beneficiaries.
View an example of a Charitable Trust.