Taking The Mystery
Out Of A Charitable Remainder Trust

You may benefit from the many advantages of Charitable Remainder Trusts.

This month, we are very pleased to have a guest author, Bro. Andrew Scott Oberman, 32°, K.C.C.H. Bro. Scott is a Past Master of Benjamin Franklin Lodge No. 642, Creve Coeur, Missouri, and an active member of the Scottish Rite Bodies of St. Louis, Missouri. He is a member of the Board of Directors, St. Louis Scottish Rite Foundation, Chairman of the Solicitation Com-mittee, and Chairman Finance/ Investment Committee. Professionally, he is a Senior Vice President, Financial Advisor, and Retirement Planning Specialist for Morgan Stanley. Other details of his civic and philanthropic activities are noted in a brief biography at the end of this article. In the following essay, Bro. Oberman points out the many advantages of Charitable Remainder Trusts.

* * *

The best way to dispel the mystery surrounding something is to define it at the outset.

What Is A Charitable Remainder Trust?

A Charitable Remainder Trust (CRT) is a plan that promises you a life income from assets irrevocably put in trust now for your future needs. After your lifetime, that income can continue for someone else's lifetime benefit (e.g. your spouse) before the selected charity receives the principal. After assuring your own financial security, your greatest reward is the enduring satisfaction of having made a major commitment to our important work.

How Does The Trust Work?

It is up to you. First, you establish how much you would like to put into the trust. Next, you decide the amount of income you would like to begin receiving from the donated assets. Finally, you choose whether you want the income amount or the income percentage to remain constant each year.

This last choice introduces the basic kinds of CRTs: the Annuity Trust and the Unitrust. The Annuity Trust pays you year after year the same dollar amount you choose at the start. The Unitrust pays you each year a fixed percentage of the fair market value of the trust's assets, valued annually.

Making Your Choice: Annuity Trust Or Unitrust?

If you would like to receive a predictable dollar amount each year regardless of any fluctuations in the trust investments, then choose the Annuity Trust. But, if you are confident the value of the trust assets are more likely to increase than decrease, or are concerned about inflation eroding the purchasing power of the fixed income investment, the Unitrust may be for you.

Naturally, you would like the dollar or percentage amount to be as high as possible. This is negotiable within limits, but keep in mind that under IRS rules your charitable income tax deductions will be higher if you choose a lower payment.

Possible Favorable Tax Treatment For Income

Each payment you receive from your CRT will be taxable, first to the extent of the trust's ordinary income, then the capital gains, either current or undistributed, from prior years. Your trust may be invested so that not all of the income you receive is taxable. Say the trust holds tax-exempt securities or earns less than the payment you receive. Once all the trust's ordinary income and capital gains have been paid out as just described, the rest of the payment is tax free.

Possible Personal Benefits

• Income tax deduction for a portion of the current value of the trust assets
• Pay no tax on gains when you give securities or other assets that have appreciated in value
• Eliminate estate taxes and settlement fees
• Actually increase your income when the trust investments yield more than the donated property
• You free yourself of investment worries and secure investment management on the assets you give.

The Mystery Is Solved

Now you have the complete definition of the mysterious Charitable Remainder Trust. It is a wonderful way to safeguard your own income requirements and, if desired, those of someone close to you. By making a gift of securities to a Scottish Rite Foundation and placing the proceeds into a Charitable Remainder Trust, you have the satisfaction of making a substantial gift to the Foundation and further promoting Masonry's philanthropic purpose.

Andrew S. Oberman is very active in the Civic Entrepreneurial Organization of St. Louis, Missouri, and is involved in fund-raising activities for the Special Olympics, Multiple Sclerosis 150 Bike Ride, Big Brothers/Big Sisters, Boys/Girls Town, St. Louis Sports Commission, Cystic Fibrosis Foundation, Men's Dinner Against Cancer, and the Walker RiteCare Clinic in St. Louis. Bro. Oberman also is Founding Chairman of the Dorothy Horton RiteCare Golf Tournament, serves on the Board of Directors of the Scottish Rite Foundation of Missouri, and is Finance Committee Chair of the Orient of Missouri, Valley of St. Louis. Bro. Oberman has a loving wife, Rhonda, and four children, Stuart, age 11, Samara, age 7, Jayme, age 5, and Marni, age 2. In his spare time, he serves as head coach of the Creve Coeur Pee Wee Hockey Team.

To learn more about the Scottish Rite Pooled Income Fund, click here. For a chart illustrating Scottish Rite Foundation, S.J., USA, Charitable Gift Annuity Rates–Single Life, please click here.

Scottish Rite Foundations, Southern Jurisdiction Pledge Form

At this time, we are unable to accept these pledges over the Internet.
Please print out and mail in the form below. Thank you.

Scottish Rite Foundations, Southern Jurisdiction Pledge Agreement

If you do not have Adobe® Acrobat® Reader™, you can download it for free by clicking here.

Barbara Golden is the Director of Planned Giving for the Development Office of the Supreme Council. Barbara is an attorney with experience in tax, corporate, and commercial real estate law. She managed a non-profit legal services organization for several years and has extensive experience in fundraising, grant writing, and program operations.

Ill. Thomas M. Boles, 33°, G.C. (left in photo) has worked extensively in fund-raising for children's programs throughout our Fraternity. For more information on planned giving, call Bro. Tom at 562–691–4227 (Fax 562–691–5327) or the Scottish Rite Foundation, Southern Jurisdiction, U.S.A., at 202–232–3579, ext. 143. Ill. Earl E. Ihle, Jr., 33°, is our development team's Director of Major Gifts. He has been a member of the Fraternity for 25 years and served in 1978 as Master of Lafayette Lodge, No. 111, Baltimore, Maryland. He is also a member of Boumi Shrine Temple in Baltimore, the York Rite, and a dual member of the Scottish Rite Valleys of Baltimore and Washington, D.C. You can reach Bro. Ihle toll free at 1–800–486–3331, ext. 143.