Charitable Remainder Trusts
Benefits:
Annuity:
A fixed and certain dollar income for life
Immediate charitable deduction
A way to increase income from a low-yield holding
Freedom from investment responsibilities
Avoidance of capital gains tax on appreciated assets used to fund the trust
Unitrust:
Lifetime income (often greater than your previous yield)
A sizable income tax charitable deduction
Avoidance of capital gains tax if you donate appreciated securities
Professional management of the assets frees you from investment worries |
Charitable Remainder Annuity Trust
If you're uncomfortable letting your future retirement dollars ride the ups and downs of the stock and bond market, try a charitable remainder annuity trust.
This plan will pay you a fixed dollar amount every year for the rest of your life, with no investment worries or responsibilities. Then after your lifetime (and the lifetime of a surviving beneficiary, if desired), the trust remainder is available to support our mission.
The charitable remainder annuity trust is more than an eventual gift to us. If lets you give away the tree and still keep the fruit, because you receive lifetime income from your donation.
Charitable Remainder Unitrust
A charitable remainder unitrust is like a combination of a gift and an investment plan. You place assets in trust and you (and/or another beneficiary) receive lifetime income from them, then we receive the remainder.
With a unitrust, the amount you receive as income is a set percentage of the value of the trust assets, redetermined annually.
You also have the option of choosing a unitrust with a net income plus make-up provision. That way, in years when the actual yield is below the stated percentage, you receive only that amount. Then later, when performance is better, those deficiencies are made up.
This option is excellent for devising a supplemental retirement plan–we can provide you with more details.
Example: Charitable Remainder Unitrust
Jane, age 60, has stocks currently valued at $100,000 and yielding a 4% dividend. She transfers them to a unitrust, incurring no capital gain. She arranges to receive 7% of the fair market value of the unitrust assets each year, payable quarterly. She receives an income tax deduction based on U.S. Treasury tables. The first year, she's entitled to $7,000 (7% of $100,000). The next year, if the value of her trust has increased, so will her income payments, so Jane has a built-in hedge against inflation.
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