Charitable Remainder Trusts

Looking for a way to give Angel Foundation a significant gift? If you have built up a sizeable estate and are also looking for ways to receive reliable payments, you may want to check out the advantages of setting up a charitable remainder trust.

Benefits of a charitable remainder trust include:

  • A partial charitable income tax deduction
  • Potential for increased income
  • Up-front capital gains tax avoidance

There are two ways to receive payments with charitable remainder trusts:

The annuity trust pays you, each year, the same dollar amount you choose at the start. Your payments stay the same, regardless of fluctuations in trust investments.

The unitrust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. The amount of your payments is redetermined annually. If the value of the trust increases, so do your payments. If the value decreases, however, so will your payments.

You can use the following assets to fund a charitable remainder trust:

  • Cash
    • You may always use cash as part of your charitable giving strategy. Oftentimes charitable remainder trusts are funded with cash in addition to stock or real estate.
  • Appreciated Securities
    • Highly appreciated assets that generate low current income are an ideal funding option.
  • Closely Held Stock
    • You may be able to convert stock that pays no dividends into an income-producing asset and receive tax benefits in return.
  • Real Estate
    • When appreciated real estate is used to fund a remainder trust, no capital gains tax is due upon the sale of the property.
  • Retirement Plan Assets
    • If you name a charitable remainder trust as a beneficiary of retirement plan assets, there will be no immediate income tax due on the plan proceeds paid to the trust because the trust is tax-exempt.
  • Tangible Personal Property
    • You may be able to contribute tangible personal property to a charitable remainder trust and turn non-income-producing property into a stream of income for you or your family.