Oklahoma Baptist Homes for Children

Neal Wooldridge

a word from Neal Wooldridge
Vice President for Planned Giving

Too Good To Be True!

Benjamin Franklin once said, "Put not your trust in money; put your money in trust." He had the right idea, at least for many people. And some of those people are friends of OBHC. They have created charitable trusts that would make Ben Franklin mighty proud of his quote.

Benjamin Franklin's portrait on a $100 billTo understand how one of these trusts works, take the case of John, an OBHC employee, and his wife, Jane. They are in their early 50’s and looking forward to retirement. In reviewing their assets, needs, and giving goals, they considered what to do with a piece of appreciated family farmland.

Fifty years ago, the property cost less than $15,000 and today it’s worth $100,000. If they sold it, they could reinvest the proceeds in something that could produce retirement income. One problem: capital gains tax. The moment they sold the property, Uncle Sam would be there with his outstretched hand, demanding tax on the gain. John and Jane would not have as much as they thought to reinvest for income.

They also considered selling the property and giving a portion of the proceeds to OBHC.

The resulting income tax charitable deduction could then be used to help offset the capital gains tax. One problem: they needed more income than the remaining funds would be able to generate. A charitable remainder unitrust answered many questions for John and Jane. They established a charitable remainder unitrust using this property.  Since the trust qualifies as a charitable trust, it sold the property without incurring any capital gains tax. The full amount of the proceeds (less closing costs) was then invested in a balanced portfolio of stocks and bonds – the right mix to provide 5 percent annual payout to John and Jane plus enough added appreciation to keep the trust growing.

Each year, in January, the trust is revalued and 5 percent of the new value is sent to John and Jane in quarterly payments or can be reinvested. This will continue through their lives.  Whatever remains will go to The Baptist Foundation of Oklahoma as endowment for OBHC. Such a remainder gift will likely be far more than the original $100,000.

The Baptist Foundation of Oklahoma will serve as a trust agency administering a charitable unitust for Oklahoma Baptists interested in helping Baptist causes.

Just look at a few of the benefits: (1) life-time income; (2) immediate income tax charitable deduction; (3) bypass of capital gains tax; (4) complete estate tax deduction; (5) a major deferred gift to OBHC. According to John, "It’s almost too good to be true!"

Do you want to learn more about charitable remainder trusts? Contact Neal Wooldridge, Vice President for Planned Giving, at (405) 570-9836. You may also e-mail Neal Wooldridge or click the button below.

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