Pohai Nani Fitness and Wellnes Center : Charitable Remainder Trust

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The Pohai Nani Charitable Remainder Trust

When you begin to consider ways to preserve your estate for retirement, when you are faced with a windfall that will result in substantial taxes, when you need to find ways to pass your IRA or other qualified retirement plan on to others, you may want to consider establishing a Charitable Remainder Trust with POHAI NANI.

A Charitable Remainder Trust (CRT) is a deferred charitable gift that is designed to let you commit funds for POHAI NANI in the future while preserving your financial security now. A CRT is irrevocable and is established under IRS regulations to provide substantial financial, tax and estate planning advantages.

Rekindling the Promise of Tomorrow

Just as the ancient Hawaiian practice of ahupua‘a provided for the community in perpetuity through careful management of its resources, so will your charitable gift to the Pohai Nani “mind body spirit” campaign provide for the current and future well being of our adult population. Thanks to your understanding and generosity, Pohai Nani and its Fitness Center will stand out as a leader in championing the rights of mature adults to live out their lives to the fullest.

Contact Information

For more information, including a no-obligation calculation of your POHAI NANI Charitable Gift Annuity, please contact Luann Foos, POHAI NANI’s Executive Director, 808-247-6211.

Is it possible to contribute property to POHAI NANI and still retain income from it for the rest of my life?
Is it difficult to establish a Charitable Remainder Trust?
Does a Charitable Remainder Trust offer any other benefits?
Can I use a Charitable Remainder Trust as a planning vehicle to shield my retirement plan from the potentially large amount of double taxes to which it may be exposed at my death?

Q: Is it possible to contribute property to POHAI NANI and still retain income from it for the rest of my life?

A: What you describe is known as a Charitable Remainder Trust. You may make a gift of cash, securities, real estate, tangible personal property or certain other property interests to a Charitable Remainder Trust for the future benefit of POHAI NANI and for your present benefit. You can retain the right to a fixed annuity in a specific sum or as a percentage of the initial value of the gift - at least 5% - for a term of up to 20 years or for your lifetime. What's more, this right to income may include a survivor as well. Tax benefits from a Charitable Remainder Trust include:

An income tax charitable deduction for the value of the property or cash contributed to the trust reduced by the value of the income interest based on IRS life expectancy tables.
Continued enjoyment of payments for life or a term of years in the form of either a fixed annuity or an adjustable unitrust amount often at rates higher than were received on the property before contribution.
Avoidance of recognition of any capital gain when the contribution of appreciated long-term capital gain property is made.
Removal of the contributed property from your taxable estate.

Q: Is it difficult to establish a Charitable Remainder Trust?

A: No. An experienced representative of POHAI NANI will work with you and your professional advisors to help you establish a Charitable Remainder Trust. What’s more, you’ll be able to take advantage of two different types of Charitable Remainder Trusts:

An Annuity Trust pays an annual fixed amount of income of at least 5% of the value of the donated assets when contributed to the Trust. Once established and funded, there can be no further contributions to an Annuity Trust nor can there be any adjustment to the annuity payments as a consequence of market conditions.
A Unitrust pays a fixed percentage (also at least 5%) of the Trust principal as revalued annually. If the Trust principal grows, the payment of income grows proportionately at the stated rate as a hedge against inflation. Certain Unitrusts may be appropriate to receive gifts of real estate in order to enable individuals to increase income productivity from this type of investment, avoid tax on the long-term capital gain and permit the trustee the flexibility to time the sale of the real estate to maximize its value for the benefit of the beneficiaries of the Unitrust.

Q: Does a Charitable Remainder Trust offer any other benefits?

A: Yes. You can generally achieve greater overall economic benefits by contributing an asset to a Charitable Remainder Trust than by retaining it in the estate for distribution to heirs. Since you might have originally intended that the contributed asset go to your heirs, you can take advantage of the financial and tax benefits which result from the creation and operation of the Trust and replace the value of the asset for your heirs, perhaps through the use of a life insurance product or Deferred Gift Annuities. Often, your heirs will receive the life insurance proceeds, for example, as a replacement asset free of both gift and estate taxes, thereby receiving a distribution of greater value than had they inherited the property directly from you. This often enables a family to have a “win-win” result from the use of a Charitable Remainder Trust.

Q: Can I use a Charitable Remainder Trust as a planning vehicle to shield my retirement plan from the potentially large amount of double taxes to which it may be exposed at my death?

A: Yes, either as part of a plan during your lifetime or through designation to take effect at the end of your lifetime. You can withdraw all or a portion of the plan after you reach the threshold age (59-1/2) and place the net amount (after taxes, which are reduced by the deduction from the use of the Charitable Remainder Trust) in a Trust. The Charitable Remainder Trust may be able to pay you tax-free income for the rest of your and your survivor’s lifetimes, and you may choose to use this income to replace a substantial portion of the value of the assets withdrawn from the plan for the benefit of your heirs, free of estate and other taxes. You can also accomplish this by creating a testamentary Charitable Remainder Trust, funding it with assets in your qualified retirement plan by designation, and, if your spouse is the beneficiary, avoid both estate and income taxes.

The information on this page is not intended to represent legal or tax advice or to substitute for such advice. Individuals are urged to consult with their professional advisors when considering charitable planned giving transactions.