A charitable remainder trust is more complex than a charitable gift annuity and typically involves start-up costs to the donor. However, the CRT is also more flexible than a gift annuity—you can name multiple beneficiaries, select the percentage of income each beneficiary will receive, and select the trustee who will oversee investment of the funds.
- You make an irrevocable gift of cash or appreciated securities to the CRT.
- The trustee pays a guaranteed percentage or amount annually to one or more life-income beneficiaries named by you.
- The percentage paid by the CRT is determined by your needs and certain IRS regulations, and the income is taxed as ordinary income.
- You receive an income tax deduction in the year the Trust is funded, for the value of the remainder interest.
- Any unused deduction may be carried forward for an additional five years.
- Upon the death of the income beneficiary, the assets are transferred to one or more charitable remainder beneficiaries named by you.
- You may designate the college's future use of the gift, or make the gift unrestricted.
There are two kinds of charitable remainder trusts:
- A Charitable Remainder Unitrust pays a fixed percentage of the trust annually to the income beneficiaries. The dollar amount goes up or down each year depending on the trust’s performance. Assets can be added to a unitrust at a later time.
- A Charitable Remainder Annuity Trust pays a fixed dollar amount, determined at the funding of the trust, to the income beneficiaries.
If you would like more information, contact Amy Nash at 800 868-8602 ext. 6303 or by email.
Please consult with your attorney or accountant on how this general information relates to your specific financial and estate planning situation. The office of development is pleased to provide you or your advisors with more detailed information.