Deseret Trust Company-Making a Planned Gift to the Church

I work for LDS Philanthropies, a department within the Office of the Presiding Bishopric, charged with facilitating and coordinating philanthropic donations to the Church and its affiliated charities. In my work we often help families who use more complicated giving tools. Whenever gifts get complicated our offices call upon Deseret Trust Company.(DTC)

I thought I would write a short post describing what they do. I wrote a few weeks back about their new Donor Advised Fund. If you haven't read about it you really should. I think it is a great tool for anyone wanting to create a philanthropic tradition in their family but would like to avoid the costs of setting up a foundation.

They actually do much more than the Donor Advised Fund. Here is a recent add we ran for them.

I am now going to introduce you to several giving vehicles you may or may not be familiar with. All of them are offered through Deseret Trust Company. I will attach a graphic for each one to show you how they work. I will only show a few examples. There are more ways to give that I can cover in a future post.

Before you dive in let me just invite you to take a few deep breathes. I have tried to use as much of DTC language in summarizing these tools. Admittedly these are complicated tools but they are worth understanding if your desire is to benefit a charity, avoid taxes, and have some kind of income come back to you or to your heir as a result of the gift structure.

The first type of vehicle is the Charitable Remainder Unitrust (CRUT)
The most popular and flexible type of life income plan is a CRUT. Cash, securities, real property, or other assets are transferred into the trust. The trustee manages the trust assets and pays you or others you choose a variable income for life or for a term of years. When the trust terminates, the remaining assets in the trust are transferred to the Church or one of its institutions.     

The next vehicle they offer is the Charitable Remainder Annuity Trust (CRAT).
With this vehicle cash, securities, real property, or other assets are transferred into a trust. The trustee manages the trust assets and pays you or others you choose a fixed income for life or for a term of years. When the trust terminates, the remaining assets in the trust are transferred to the Church or one of its institutions.

The next vehicle they offer is the Charitable Gift Annuity (CGA).
A CGA is a great choice when a guaranteed income is desired. A gift of cash or securities is transferred to Deseret Trust Company in exchange for a contractual life income paid monthly or quarterly. The income is guaranteed by the issuing charity. A portion of the gift is invested and used to provide income for life, and the remaining portion qualifies as a present-interest gift to the Church or one of its institutions. Part of the annuity income may be received tax free. Any capital gains taxes due on the asset that was exchanged for the annuity are paid over the annuitant's life expectancy.

The next vehicle they offer is the Deferred Charitable Gift Annuity (DCGA).
This gift type is good for those who want a future guaranteed income. A gift of cash or securities is transferred to Deseret Trust Company in exchange for a contractual life income paid at least annually. The income is guaranteed by the issuing charity. A portion of the gift is invested and used to provide income for life, and the remaining portion qualifies as a present-interest gift to the Church or one of its institutions. Part of the annuity income may be received tax free. Any capital gains taxes due on the asset that was exchanged for the annuity are paid over the annuitant's life expectancy.

Ready for another one? This is the Pooled Income Fund (PIF)
This tool is often referred to as the "mutual fund of life income gifts." A gift of cash or securities is transferred into a pooled income fund at Deseret Trust Company, which, as trustee, manages the assets and pays an income for life to you or the income beneficiaries you designate. At the death of the income beneficiary, the remaining assets left in the pooled income fund account are transferred to the Church or one of its institutions.

The last one I will share in this post is the Charitable Lead Trust (CLT).
Take on more breath, this one is still more complicated. It is often seen as the opposite of a charitable remainder trust. A donor transfers property to the lead trust, which pays a percentage of the value of the trust assets, usually for a term of years, to the Church or one of its institutions. At the end of the trust term, the remaining assets in the trust and any growth it has realized are passed to your heirs. Although there is no income tax deduction when you create a charitable lead trust, your gift or estate tax is greatly discounted and any growth is passed to your heirs gift and estate tax free. It is one of the only transfer device currently used that can discount the value of the original assets and result in little or not taxes. At the same time you fulfill your charitable desires.

So are you completely confused yet. I hope not. If you are, give me a call and I can introduce you to the nice folks at DTC. 801-422-1940