Planned Giving

This type of trust pays a fixed percentage annual income on the value of the assets used to fund the trust. This valuation of assets happens at the time the trust is established and never changes. Example: A $100,000 gift is placed in trust and is paying a 6 percent annual income. The annual payment is always $6,000 a year.

This type of trust pays a fixed percentage annual income based on the value of the assets used to fund the trust as determined by an annual valuation of the assets in the trust. This means that, if the value of the assets in the trust increases over time, so does your annual payment. The percentage never changes, but the value of the trust may increase, thereby increasing the income from the trust. Example: A $100,000 gift is placed in a trust and is paying a 6 percent annual income. The first year, the payment is $6,000. At the beginning of the second year, the $100,000 used to fund the trust has grown to $110,000. The annual payment is now 6 percent of $110,000 or $6,600. Please note that the value of the trust can increase or decrease over time.

Example:

Mr. Smith creates an annuity trust with stock he has held for a number of years. While the stock has grown in value over the years, Mr. Smith would like to increase the income he receives from the stock above the small annual 1 percent dividend payment. The original cost of the stock (cost basis) is $50,000. The stock is now worth $100,000. Mr. Smith decides he wants to receive a 5 percent annual payment for a term of 20 years.

Mr. Smith will receive the following benefits from setting up an Annuity Trust:

• Increased annual income from $1,000 a year in dividend payments to $5,000 a year annuity payments, totaling $100,000 over 20 years

• Bypass the capital gains tax (up to 20 percent) on the $50,000 appreciation of the stock for tax savings of up to $10,000

• Receive a charitable tax deduction of approximately $47,000 (assumes a 28 percent tax bracket) for tax savings of approximately $13,000

• An eventual gift to Pacifica of approximately $284,000 (assumes a 9 percent annual growth of the trust assets)

A Pooled Income Fund combines gifts from numerous donors in a single, diversified fund. Annual payments to you or your beneficiaries are determined by the fund’s performance.

A Charitable Lead Trust allows you to provide Pacifica with income from specified assets for a designated period of time. You retain the right to reclaim the assets or pass them on to your heirs. If you have a sizable estate, a Charitable Lead Trust may be the best way to pass along your estate to heirs and avoid gift and estate taxes. Similar to in a remainder trust, assets are placed into the lead trust and an annual payout rate is established. However, Pacifica would receive the annual payout instead of you and/or other beneficiaries. At the end of your lifetime or a specific number of years, the assets in the trust would then be returned to you or your heirs. This gift lets you enjoy both the philanthropic and tax benefits of a charitable gift without forfeiting the assets, and can help you pass along those assets to your heirs with a substantially reduced estate and gift tax burden.

Example:

The Smiths decide to place $10 million in assets into a Charitable Lead Trust. They also decide that Pacifica is to receive 5 percent for 25 years. The results are as follows:

• Provide Pacifica with an annual gift of $500,000 or $12.5 million over 25 years

• Minimize the estate tax

• Minimize the generation skipping tax

• The full $10 million gift, plus the growth on the assets in the trust over and above the 5 percent paid out to Pacifica, can be passed on to the grandchildren

A Charitable Gift Annuity is a contract under which Pacifica, in exchange for your irrevocable donation of cash or marketable securities, agrees to pay you or your designated beneficiary a fixed annuity.