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Charitable Remainder Trusts

Goal: Secure payments for life while reducing market risks
Benefit: Potential increased income and tax benefits

Charitable Remainder Trust

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Regarding Capital Gains Tax – At the sale of appreciated assets within the trust, capital gains tax is avoided as a charitable remainder trust is a tax exempt entity.

Susan and Fred know what hard work is all about. And now they have some time to relax a bit.

Susan: "I was one of the lucky ones. Times were hard, but my family was given the help and support we needed. Did it make a difference? Only in every aspect of my life! I don't know where I'd be today without it."

Fred: "We know how important help is, and we know how difficult it is for organizations to develop the funding they need. Facilities, endowment, training, staff- it's all literally urgent."

Susan: "We benefited because others had made sure help was available when we needed it—now we can give back. And what a joy it is to know that when we no longer need the money, part of it is going to someone who does. It's awesome—we are changing lives!"

Fred: "That's why Susan and I made the decision. Not only will the trust provide income to us throughout our lifetimes, but we have peace of mind knowing that the remainder will benefit people in our community who need the help."

There are two different types of Charitable Remainder Trusts.

  • A Charitable Remainder Unitrust (see example) is a popular way to achieve tax benefits as well as a fixed annual percentage on the value of the assets in the Trust. The assets are revalued annually and, if the trust value changes, the payment to the beneficiary(ies) changes.
  • A Charitable Remainder Annuity Trust is set up to pay a fixed rate of return based on the initial valuation at the time the property is placed in the trust. The Trust assets are never revalued.

Additional information on Charitable Remainder Trusts is available. Charitable Remainder Trusts provide a good degree of flexibility that is valuable in charitable gift planning, especially when dealing with appreciated assets. For example, a variation on remainder Trusts can be an effective way to make gifts of real estate.

Susan and Fred are happy that they have made a difference; a difference that will have a profound impact on the lives of others.

For more information or a confidential discussion of your charitable options, please email or call Ann Moffitt at 717 232-7509 ext. 133.

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