Craig’s Story

family farm. Craig thought the machinery would likely bring in $250,000, and the land another $800,000. Additionally, Craig had inherited some stock in two large companies from his father, which he had never sold. Upon evaluating his situation, Craig realized he was about to experience the highest earning years of his life as he wound down his farming operation and investments, and he knew that it would equate to the highest tax burdens he had ever experienced too. Craig knew that between his Social Security, his wife’s teaching pension, and what they had saved into their IRAs over the years, he did not need much more income to live comfortably.

After meeting with his financial planner, Craig decided to transfer ownership of the grain, machinery, some stock, and some farm ground into a Charitable Remainder Trust prior to sale. The Trust then sold each asset, and Craig avoided owing capital gains or income tax on those assets in the Trust. Instead, Craig now takes 5% of the invested Trust assets each year to supplement his income. When Craig passes away, the beneficiary of the Trust, a nonprofit like CYFS, will receive what remains of the balance as a gift.