Earle & Marti

A “Win-Win” Situation

 

Earle and Marti were ready to move into a retirement center. They had lived in their lovely California home 50 years and benefited from a large appreciation in its value. Purchased for $18,500, it would now sell at $1.2 million. But they faced losing 21 percent of the appreciation above their exclusion of $500,000 to capital gains taxes.

Working with Point Loma Nazarene University, they found out that through a "Trust and Sale" they could actually keep almost $600,000 in cash and put the remainder in a Charitable Remainder Annuity Trust. The trust would give them monthly pay-outs that would more than meet the monthly payments for the retirement center of their choice for the remainder of both of their lives.

Earle said, "We had already planned to leave a bequest gift to Point Loma Nazarene University. This plan helps us to leave more than we had dreamed possible, provide cash now, plus have a stream of income that enables us to pick a nice retirement center with no worries. Saving about $125,000 in taxes allowed us to keep our entire equity intact. Point Loma worked well with our realtor and tax advisors and did us a great service."

Marti added, "Besides, after we are both gone, it is important to us that our gift will go on helping students receive a solid Christian education."

For appreciated assets, a gift/sale or trust/sale has the possibility of preserving assets and providing extra income, as well as leaving a significant legacy. It is a time-honored process of using an available tool to accomplish significantly more than is otherwise possible.