As we grow older, the concept of "creating a trust" isn't quite so simple. Now, we think, "Trusts are only for the rich." Or, "They're too complex, too hard to understand or too expensive."

Let us help. Remember your childhood idea of "trust" as we look at a way to benefit yourself and your family while supporting the good works you believe in.

Charitable Remainder Trusts (CRT)
Established by the Tax Reform Act of 1969, a Charitable Remainder Trust is an irrevocable tax-exempt trust designed to provide you and/or your spouse with specific benefits while also letting you support charitable works (i.e. those of the Franciscans).

The benefits of establishing a Charitable Remainder Trust include:

• Receiving a lifetime income
• Immediate income tax deduction
• The ability to sell appreciated assets with no capital gains tax
• The ability to lower your estate tax
• The ability to provide a substantial future gift to the Franciscans

You should consider putting a Charitable Remainder Trust to work for you when:

• You want to make a substantial gift to the Franciscans but can't afford to give up your current income
• You are concerned about the estate tax burden your heirs will face at your death
• You have a highly appreciated asset, earning little or no income, which you can't or won't sell because of the capital gains tax

How does a Charitable Remainder Trust work?
You transfer cash or an appreciated asset (such as stock or real estate) into an irrevocable trust, naming yourself as the income beneficiary and the Franciscans as the remainderman (the charity you wish to support) and Trustee. The Trustee sells the appreciated asset at full market value, paying no capital gains tax, and reinvests the proceeds for growth and income. During your life, the Trust pays you an income. At the time of your death, the remaining Trust assets go to the Franciscans.

Why not sell the asset myself and reinvest?
You could, but you would pay more in taxes and receive no income tax deduction, and there would be less income for you. Here's an example:

Mr. and Mrs. Smith bought stock in XYZ Co. in 1970 for $10,000. Today the stock is worth $100,000 and is paying them dividends of just $3,000 per year. They are sure they could earn more income if they sold the stock, but they don't like the idea of paying $25,000 in capital gains tax. They already support the works of the Franciscans through their annual giving, but they would like to do more (see chart, below).

What are my income choices?

With an annuity trust, you specify a fixed dollar amount that you will receive each year, regardless of the investment performance of the trust assets. That set dollar amount must be at least 5 percent of the initial value of the asset(s) gifted to the trust. If you want to specify an amount larger than 5 percent you may, within IRS guidelines.

The unitrust varies from the annuity trust in two significant ways: 1) With a unitrust, you specify a percentage of the trust's value as the amount you receive each year. The size of your annual payment varies from year to year, depending on the investment performance of the trust assets, which are revalued annually. As the value changes, your payment amount changes. Here too, your annual payment must be at least 5 percent of the trust's value. 2) Unlike the annuity trust, the unitrust allows for additional contributions in the future.

Convenience
Your trust can make payments to you quarterly, semiannually or annually. You choose. Your payment will be mailed to you automatically. No certificates to safeguard, no coupons to mail in, no rents to collect, no property to manage! We also furnish you with all the pertinent tax information you need.

I like the sound of this, but what about my heirs?
If you have a sizeable estate, the asset(s) you gift might be only a small percentage of your total estate, so your heirs still would be well taken care of. However, if replacing the value of the gifted asset for your heirs is a concern you have, there is an easy way to take care of it. By funding an Irrevocable Life Insurance Trust (ILIT) with a portion of your increased income and tax savings, the trustee of the ILIT can purchase life insurance on you to replace the gifted asset for your heirs - tax free. And you can control when and how they receive it.

What do I do next?
Trusts really are simple to understand. Just remember your childhood, when you created them all the time. We would be happy to consult with you. Fill out the attached form and send it to us. We will send you more information about the specific benefits you could receive by establishing a Charitable Remainder Trust to continue the good works of the Franciscans. Let us show you what your gift will do for you and for others.

Comparison of Income After Sale

Husband and wife, ages 65/65 with normal life expectancies; balances invested in asset(s) paying 7% annual income with 3% annual growth; 7% Standard Unitrust; Tax deduction based on 7% applicable federal rate.

If you prefer to mail this form, print and mail it to:

The Franciscans
1500 34th Avenue
Oakland, CA 94601-3092
Tel: (916) 443-5717
Fax: (916) 443-2019

Trust type:	Annuity Unitrust Other
Personal Information
Name:
Address:
City:
State:	AL AK AR AZ CA CO CT DE DC FL GA HI IA ID IL IN KS KY LA MA MD ME MI MN MO MS MT NC ND NE NH NJ NM NV NY OH OK OR PA SC SD TN TX UT VA VT WA WI WV WY   Zip:
E-mail:
Date of birth:
Description of Potential Asset
Have you owned this asset for longer   that one year?
	Yes     No
Fair Market Value:
Cost Basis of asset:
Any debt on asset?	Yes     No
If Yes, amount of debt:
Are you concerned with replacing   the value of this asset for   your heirs?
	Yes     No