The ManagedIncomeTM Trust Program

Our Program provides nonprofits and advisors a centralized source for the design of a specialized tax-exempt trust on a turnkey basis. The Program allows the trustees the ability, within specific legal limitations, to manage income and taxation as well as provide investment allocation of assets contributed using a variable annuity contract as the primary trust investment vehicle.

In compliance with IRC 664 and substantiated by several private letter rulings, a properly drafted trust document which includes “net income with make-up provisions” and specific “income” definitions allows for these special features.

Income and/or gain of invested assets within the annuity contract are not accounted for as income and/or gain within the trust itself until such income or gain is distributed from the annuity contract into the trust. Thus allowing for a build-up of income and gain for future use in trust distribution planning.

Trust administration, valuation, accounting, tax preparation and planning are coordinated by our firm on an ongoing basis.

The trustees can be named as lifetime beneficiaries and have the revocable right to name as ultimate future beneficiaries one or more charities, a private family foundation or a donor advised fund.

Selected assets are transferred to the trust, liquidated and used to purchase one or more annuity contracts. Funds are then allocated within the sub-accounts available within the respective annuity contacts in order to satisfy asset allocation objectives. Based upon the amount contributed and other specific factors, a tax deduction is provided to the donors of the trust.

This tax deduction is limited in use for offsetting income of the donors each year by a percentage (30% for non-cash contributions or 50% for cash contributions) of adjusted gross income of the donor(s) and is limited to a five year carry-over.

In summary, an assortment of both charitable and personal financial objectives can be achieved through the proper design of a ManagedIncomesmTrust.


The ManagedIncomeTM Trust Program

A Sample Case

Initial Contribution of $1,000,000


Manage Your

Investments   —   Income   —   Taxation   —   Giving

Key Features

Generates a substantial income tax deduction

Allows for enhanced control of income and taxation

Can enhance investment diversification

Can provide supplemental retirement income

Minimizes capital gains taxation on appreciated assets

No contribution limitations

Can satisfy charitable desires

Can provide for asset protection

Can provide tax deferred asset growth

Can eliminate estate taxation on contributed assets

The ManagedIncomeTM Trust Program

Can assist in achieving client objectives when:

   • Selling a Closely-Held Business, Selling Publicly Traded Stocks, Bonds or Mutual Funds

   • Selling Real Estate — Farm Land, Commercial or Residential Property

   • Clients can be both Trustees and Lifetime Beneficiaries of the Trust

“The Limited Use and Control of contributed assets by the Trustees while living and at death”.