In a charitable gift annuity, a donor agrees to irrevocably transfer money or property to a charity, such as the Southeast Alaska Land Trust, and the charity agrees to make regular fixed annuity payments to one or two beneficiaries specified for life. If the land trust agrees to accept the unrestricted property, then it might sell the land subject to a conservation easement to generate the proceeds needed to make the annuity payments. The gift usually qualifies for a charitable income tax deduction at the time of the gift, based on the value of the assets less the expected value of the annuity payments.
Under a charitable remainder unitrust a donor irrevocably transfers money, property, or both to a financial trust with the stipulation that funds in the trust will go to Southeast Alaska Land Trust at the end of a specified term. If the property has conservation value, then a conservation easement can be conveyed before being put into the charitable remainder unitrust. The trustee (financial trust) sells the land and invests the net proceeds from the sale. One or more beneficiaries specified receive annual payments based on a percentage for a fixed term or for life, then the trustee turns the remaining funds in the trust over to the land trust. The gift qualifies for a charitable income tax deduction when the assets are put in the trust, based on the value of the assets less the expected value of the payments.
A charitable lead trust operates conversely to a charitable remainder trust by providing a stream of income for a specified period of time to Southeast Alaska Land Trust. A donor transers money, property, or both to an irrevocable trust. The trust is managed by a financial professional and payments are made to the charity for a term of years or life. At the end of the trust term, the assets in the trust either revert to the donor or pass to the donor’s family members or other beneficiaries. A charitable lead trust can provide both the gift and estate tax deductions and can offer savings of capital gains taxes when the trust sells appreciated assets.
In a pooled income fund a donor transfers money or securities to Southeast Alaska Land Trust. The gift is pooled with those of other donors who make similar gifts, and then invested. Each donor receives a pro rata share of the income fund’s dividends and interest earnings every year for life. The income is taxed as ordinary income to the beneficiaries. When a beneficiary dies, Southeast Alaska Land Trust removes assets from the fund equal to the beneficiary’s share of the fund and uses them for conservation purposes.