Tools For Giving Later
Charitable Remainder Trust
What are they?
Giving through a charitable remainder trust allows your client (or someone they select) to receive income for the life, knowing that whatever remains will benefit their community. They do this by placing cash, property, or other assets into a trust that distributes to the "income beneficiary""an annual income for life or for the duration of the trust. Your client receives an immediate tax deduction for the present value of the gift in the year the gift is made. After death or the end of a specified trust term (up to 20 years), the remainder of the trust transfers to a fund your client has named at the Community Foundation or to a specific charitable organization. Grants from the fund will be made in accordance with their interests.
Highlights:
- Your client may choose to receive a fixed income or receive distributions that vary with the value of the trust.
- The income beneficiary can be your client or someone else, including a sibling, dependent parent, friend, or former employee.
- A charitable remainder trust is particularly useful for people who own securities or real estate that have increased in value but earn little income, since the assets-once placed in the trusts-can be sold and reinvested free of capital gains tax.
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