Charitable Remainder Trusts and Wealth Replacement Trusts – by Mary Van Vleck

When I turned sixty, I decided to simplify my life by downsizing my home and consolidating my finances. I had four simple goals - reduce my tax burden, ensure an annual income for myself, continue supporting the American Indian College Fund through a legacy gift, and take care of my family.

Achieving my goal was easier than I thought. My financial advisor and estate planning lawyer recommended I establish two types of trusts - a Charitable Remainder Trust (CRT) and a Wealth Replacement Trust (WRT).

A CRT allows me to take care of my first three goals. I established my CRT by transferring several highly appreciated, low cost-basis stocks, which were then sold and the proceeds invested in a diversified portfolio of stocks and bonds. And because it's a charitable trust, I received a partial tax deduction based on the market value of my stocks and I didn't have any capital gains taxes when my stocks were sold. At the time of my death, a portion of the remaining value of my CRT will be distributed to the College Fund.

My WRT owns a life insurance policy that's equal to the initial value of the gift I made to my CRT. My children and grandchildren are my beneficiaries and they will receive the death benefit from my life insurance policy tax-free. I'm proud of my legacy and am comforted that all my hard work to get to this point in my life will support me, my family, and Native scholars in the years to come.

To learn more about this type of planned gift, or other ways to include us in your estate plans, contact Emi Deguchi at [email protected], call 303-430-5326, or visit www.collegefundlegacy.org. And of course, speak with your trusted financial advisor or estate lawyer.