You contribute cash, securities or other property to a trust.
The trust makes fixed annual payments to Soroptimist for a specified term of years.
When the trust ends, the assets revert back to your heirs.
Benefits
You qualify for a gift tax deduction for the present value of the annuity payments to Soroptimist.
You can adjust the annuity payments and the term of the trust to reduce or even eliminate the transfer taxes due when the principal reverts to your heirs.
All appreciation that takes place in the trust passes tax-free to your heirs.
You can use your available estate tax credit ($1.5 million per person in 2004 and 2005; $2.0 million per person beginning in 2006) to further reduce taxes on transfers to your heirs.
You can have the satisfaction of making a significant gift to Soroptimist now that reduces the taxes due on transfers to your heirs later.
