<b>Who would prompt a successful businessman to consider selling substantial income producing California rental property?</b> This story starts with a longstanding relationship between a senior couple from California and one Colorado financial advisor.  
 
<img src="{filedir_1}CRAT-web.jpg" width="180" height="240" class="floatright" /><b>Mr. Carlson had been very successful in real estate. However, the burden of managing a number of rental apartments was keeping him from turning his time and attention to the increasing physical needs of his wife.</b> Selling one of the fully depreciated buildings had very significant tax consequences ... consequences he wanted to avoid. In addition, selling could reduce his family retirement income. Mr. Carlson’s trusted professional advisor and friend, who was familiar with WaterStone charitable solutions, suggested a Charitable Remainder Annuity Trust (CRAT).

<b>Right solution. Right time.</b> Mr. Carlson’s advisor proposed that:
<ol>
<li><em>He donate a $1.2 million fully depreciated, debt free apartment building to WaterStone as trustee to form a CRAT.</em></li>
<li><em>The CRAT would be established to provide guaranteed payments of 6% or $72,000 per year to him for the rest of his life.</em></li>
<li><em>To further guarantee the CRAT payments, WaterStone would purchase a single premium annuity from New York Life through his advisor.</em></li>
</ol>

<b>Once implemented, this CRAT solution delivered significant and immediate benefits to Mr. Carlson:</b>
<ul>
<li><em>The building sold through the CRAT with no immediate tax consequences;</em></li>
<li><em>He received a significant charitable income tax deduction;</em></li> 
<li><em>The assets were removed from his taxable estate;</em></li>
<li><em>He was freed from apartment building management responsibilities;</em></li>
<li><em>CRAT payments exceeded his previous rental income;</em></li>
<li><em>The charitable portion of the trust would be used to support his favorite charities, including a preparatory school where he was nurtured as a young man and the mission sending organization under which his son and wife serve;</em></li>
<li><em>He regained precious time to devote to his wife.</em></li>
</ul>
<p><b>The multiplying affect of trusted relationships made the solution possible and successful:</b>
<img src="{filedir_1}CRAT-formula.jpg" width="496" height="232" />
<p>We’d love to explore the benefits of this CRAT option with you and your family. Please contact Bryan Miesel, WaterStone’s Director of Marketing, (719) 447-4620 or bryanm@waterstone.org.</p>
<p>For a print version of this article, <a href="{filedir_1}The-Multiplying-Effect-F.pdf">download the pdf</a>.</p> 
<p><a href="/?/enewsletters/list/C113/" title="< Return to Spring 2011">< Return to Spring 2011</a></p>