Many people wish they could support Mount Vernon in a truly meaningful way, but they hesitate to contribute assets they may need for use in generating income in the future.

If you are in this situation and have a significant amount of assets available, you may want to consider setting up a charitable remainder trust.

Mount Vernon will gladly work with you and your advisors to help establish such a trust.  Depending on various factors, it is usually feasible to fund a trust with assets worth $100,000 or more.  Donors typically draw upon cash or long-term appreciated securities, but assets such as real estate can sometimes be appropriate as well.

Charitable Remainder Annuity Trust

When you establish a charitable remainder annuity trust, a fixed sum of money is paid to you and/or another named beneficiary(ies) each year for life or for a specified term of up to 20 years. When the trust ends, its remaining assets pass to Mount Vernon.

If you want to secure a steady stream of payments or increase cash flow from low-yield holdings, these trusts are a good choice because the amount you receive is set, regardless of how the value of the trust changes over time.  You can also take an immediate charitable deduction for part of the value of what you contribute to the trust, as well as avoid or delay capital gains taxes on appreciated assets used to fund the trust.

Charitable Remainder Unitrust

A charitable remainder unitrust is something of a combination of a gift and an investment.  You place assets in a trust, and then you and/or another named beneficiary(ies) receive lifetime income from the trust.  When the trust ends, Mount Vernon receives what remains of its assets.  With a unitrust, the amount you receive as income is a fixed percentage of the annual net fair market value of the trust assets.

This can be a good choice because it provides the opportunity to increase your income as the value of the trust’s assets increases (although income may decrease from one year to the next if the value of the trust’s assets declines).  Unitrusts also offer a sizeable income tax charitable deduction and may help to avoid or delay capital gains taxes if you contribute appreciated assets.

NOTE: Unitrusts, unlike annuity trusts, also allow you to add funds to the trust over time, thereby affording a measure of flexibility.

Charitable Lead Trusts

It is also possible to establish a charitable lead trust, which is the opposite of a charitable remainder trust: payments are made to Mount Vernon each year during the trust’s existence, and when the trust terminates its remaining assets are distributed to one or more individuals.  The amount paid may be either fixed (a lead annuity trust) or variable (a lead unitrust).

Tax advantages of lead trusts can include the ability to increase charitable giving and, in some circumstances, to reduce the size of one's estate, so that when assets are transferred to heirs upon death, estate taxes are either reduced or eliminated.

Example 1: Remainder Trust

Charles, age 64, is a long-time supporter of Mount Vernon.  Among his assets are shares of stock in a single company.  He acquired the shares many years ago for $90,000.  Today they are worth $250,000 although they pay a modest dividend of only 2 percent, i.e., $5,000 per year.  He would like to receive more income from this investment, yet he is reluctant simply to sell the shares and reinvest the proceeds, due to the tax he would have to pay on the $160,000 in capital gain.

Instead of selling the shares, he uses them to create a charitable remainder unitrust.  The trust, as a tax-exempt entity, is able to sell the shares without paying any capital gains tax.  Each year, the trust will pay him 6 percent of whatever its assets are worth at the beginning of the year.  In addition to increasing his cash flow substantially, Charles receives an income tax charitable deduction of approximately $100,000, plus he has the satisfaction of knowing that the trust will ultimately provide substantial funding for Mount Vernon.

Example 2: Lead Trust

Charles’s sister, Margaret, age 67, also wants to benefit us but prefers that her gift be available to Mount Vernon now, rather than upon her death.  In addition, she is looking for ways to decrease gift and estate taxes payable in connection with the portion of her wealth she would ultimately like to transfer to her two children, who are now in their thirties.

Over the years, she has invested in a growth-oriented mutual fund, paying only $150,000 for shares that are now worth $800,000.  She has an estate worth many millions of dollars and does not need the negligible amount of income the mutual fund shares provide, although she would like for her children eventually to receive as many of the shares as possible.

Accordingly, she contributes the shares to a charitable lead annuity trust that will pay Mount Vernon $56,000 (i.e., 7 percent of $800,000) each year for the next 15 years, with the trust selling only those shares needed to make the payments as they come due.  Taking into account not only the trust’s obligation to make these payments but also its costs of administration, if the shares are nevertheless able to increase in value at a rate greater than about 8 percent per year, then the trust’s assets will be worth more than $800,000 by the time it terminates.  Even though all of what remains in the trust when it ends will be distributed to the children, for gift and estate tax purposes Margaret will be deemed to have transferred to them assets worth only about $250,000.

The income, estate, and gift tax benefits of these giving tools vary, so please feel free to check with us and then confirm the specifics with your own advisors.

Join Our Legacy Society with Your Planned Gift

If you include Mount Vernon as a beneficiary of a charitable trust, you become a member of our legacy group: the Ann Pamela Cunningham Society.  Ann Pamela Cunningham founded the Mount Vernon Ladies' Association in 1853 and tirelessly gathered support from across America to rescue George Washington's home, sparking the U.S. historic preservation movement.

Our hope is that you will let us know about your planned gift so we can thank and recognize you.

You will receive these privileges of membership in the Ann Pamela Cunningham Society:

·                     Personalized certificate of appreciation

·                     Free subscription to Mount Vernon’s Yesterday, Today, Tomorrow newsletter

·                     Mount Vernon’s annual report

·                     Updates on Mount Vernon news

·                     Invitations to events and special evenings

·                     Recognition of your planned gift in Mount Vernon publications

                       (unless you prefer to remain anonymous)

Special Considerations

Please contact us about restricting your gift to the specific Mount Vernon program(s) of your choice.

Unrestricted contributions are preferred; however, we also welcome a conversation if funding a specific program is critical to you.  We have many projects – both short-term and ongoing – at Mount Vernon for which we seek support.  We can tell you about all the available options today – and tomorrow, when posterity will visit and revere George Washington’s home and legacy.

Gifts to Mount Vernon may be made in memory of any deceased person(s) or in honor of any living person(s).  If you give us permission to list your planned gift in our annual report, then we will list your name along with your brief gift dedication.

Other Types of Planned Gifts that May Interest and Benefit You

If you are considering a charitable trust to benefit Mount Vernon, be aware that other gift types – such as an outright donation of securities or real estate, a charitable gift annuity, or a retained life estate arrangement involving a personal residence – may be suitable or preferable, taking into account your goals and needs.

Of course, arranging a gift for Mount Vernon through a will or through some other element of an estate plan – e.g., including our organization as a beneficiary of a financial, retirement, or insurance account or asset – is also an act of considerable generosity that many people can afford even if a large lifetime gift is not realistic.

Our development staff can help you plan the right gift in light of your assets, income, and family and other estate or financial obligations.  You may be able to be a greater philanthropist than you realize.  Would you consider making the gift of a lifetime to Mount Vernon if we can show you how?