The ManagedIncomeTM Trust Program

The Program allows 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 which includes “net income with make-up provisions” and specific “income” definitions creates these special features.

IIncome 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.

Design and Administration

Trust administration, valuation, accounting, tax preparation and planning can be coordinated by our firm. Trustees can be named as lifetime beneficiaries and have the revocable right to name as ultimate future beneficiaries one or more charities, a private 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 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 of adjusted gross income of the donor(s) with a five year carry over.


An assortment of both charitable and personal financial objectives can be achieved through the proper design of a ManagedIncomesmTrust Program.


The ManagedIncomeTM Trust Program

A Sample Case

 Initial Contribution of $1,000,000



 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

An integrated system of marketing, planning, case design, training, administration, compliance and documentation.