Creating a Trust

You can make a meaningful gift to San Antonio Hospital Foundation without giving cash, and, your non-cash gift does not automatically mean giving up the income from stocks or other investments.

There are several ways to make a gift while retaining the income generated by the asset. These include charitable remainder trusts, short-term trusts, and charitable lead trusts.

The benefits of each of these options vary, but they all share the following advantages:

• Income paid to you or another beneficiary such as your spouse, or both
• A tax deduction for a significant portion of the value of the gift
• Capital gains tax is greatly reduced or avoided altogether if the gift is in the form of appreciated securities or real estate
• Your income may increase when the gift is invested in a way that provides a higher yield than the asset previously produced

Three Types of Trusts

Charitable Remainder Trust

If you are interested in making a charitable gift that pays you a lifetime income, a charitable remainder trust (CRT) may allow you to make that happen. These trusts can be funded with cash, securities, appreciated stock or real estate, and can be created with San Antonio Hospital Foundation as the beneficiary with an asset valued at $50,000 or more.

The advantages of a CRT are:

• A significant income tax deduction
• You avoid capital gains taxes
• You and/or your spouse receive an income that is usually greater than your asset is producing
• You may add assets to the trust over time

Short Term Charitable Remainder Trust

With a short-term trust, a fixed percentage of the trust's principal value is paid each year to members of your family. At the end of the trust period, typically five to 20 years, the principal assets of the trust are distributed to San Antonio Hospital Foundation. The benefits of a short-term trust are:

If you are looking for a way to minimize estate taxes or you need a method to finance a short-term family expense, such as post-graduate school for a child,

then a short-term trust is an attractive possibility.

• An income tax deduction
• The ability to create income now for family members
• The potential minimization of estate taxes
• An opportunity to benefit from an appreciated asset without incurring capital gains tax

Charitable Lead Trust

If you are looking for a way to benefit San Antonio Hospital Foundation now, while leaving the principal of an asset or assets to your heirs, a charitable lead trust can make that possible.

The income generated by the assets in the trust is paid to the Foundation during the term of the trust, after which the assets are passed along to your heirs, usually with significant estate tax savings. Essentially, you are loaning the use of the assets to the Foundation, while making your heirs the ultimate beneficiaries of the assets themselves.

A Final Word

Trusts are easy to establish and provide wonderful advantages to the creator of the trust. They provide a significant tax deduction and may also increase income and eliminate the capital gains and estate taxes that might otherwise be incurred on the asset.

Trusts also help secure the future of our community hospital. This is truly a win-win situation for the hospital and your family. If you would like to learn more about how these trusts may benefit you and the hospital, please contact Mike Tracey, President of the San Antonio Hospital Foundation, at 909.920.4962.