The annuity trust is similar to the unitrust in many but not all aspects. After your lifetime, the principal of your trust goes to Cardinal Glennon Children's Hospital as an enduring contribution to our work. To set up this plan, you irrevoc ably transfer cash or securities or both to an annuity trust that is professionally managed by Glennon. The trust then pays you an income for life. At the start, you choose the fixed dollar amount of income you wish to receive each year, payable in quarterly installments.
Any excess is deductible over the next five years.
As noted earlier, Clara used appreciated securities to fund her trust. She will pay no tax on the appreciation. Her deduction is calculated on the current market value of the securities instead of their lower cost basis. If you wish, you can choose to have the trust pay an income to a survivor such as your spouse, another relative or a friend. A fixed and certain dollar income for life.