Charitable Remainder Trust
Planning for the
future—for you and your community.
Giving through a
Charitable Remainder Trust allows you to receive income for the
rest of your life, knowing that whatever remains will benefit
your community.
You may choose to
receive a fixed income or one that changes with market
conditions— income from the Charitable Remainder Trust you
establish may add up to more than interest and dividends you
earned from holding the assets. You can use it to supplement
your own lifestyle or that of someone other than yourself: a
sibling, a dependent parent, a friend, or a former employee.
A portion of the
income may be a tax-free return of principal, while some is
taxed as ordinary income or capital gains. The amount of income
received depends on the payout rate selected by the donor. The
tax deduction allowed depends on the age of the recipient, the
payout rate, and the discount rate (as determined by the
Internal Revenue Service).
You can pick one of
these options for your Charitable Remainder Trust:
-
Annuity trust
pays you a fixed dollar amount.
-
Standard
unitrust pays you an amount equal to a fixed percentage
of the net fair market of the trust and is recalculated
annually.
-
Net income
unitrust pays you the lesser of the fixed percentage
specified by the trust agreement or actual trust income;
some net income unitrusts allow you to make up deficiencies
in past years.
-
Flip unitrust
is a net income unitrust that converts to a standard
unitrust upon a triggering event, such as the sale of an
asset used to fund the trust.
How it works:
-
You transfer
cash, appreciated stocks, real estate, or other assets into
a trust.
-
You receive an
immediate charitable tax deduction for the charitable
portion of your trust.
-
The trust pays
you or a beneficiary you designate regular income payments.
-
Upon the
beneficiary’s death or after a defined period of years, the
remaining assets in the trust transfer to the community
foundation.
-
We set up a fund
in your name, in the name of your family or business, or in
honor of any person or organization you choose.
-
We handle all
the administrative details after the fund is established,
issuing grant awards to charities in the name of the fund.
-
Your gift can be
placed into an endowment that is invested over time.
Earnings from your fund are used to make grants addressing
community needs. Your gift—and all future earnings from your
gift—is a permanent source of community capital, helping to
do good work forever.
