Charitable Remainder Trust

 

Charitable remainder trust is an arrangement in which property or money is donated to the church, but the donor (called the grantor) continues to use the property and/or receive income from it while living. The beneficiaries receive the income and the church receives the principal after a specified period of time.

The grantor avoids any capital gains tax on the donated assets, and also gets an income tax deduction for the fair market value of the remainder interest that the trust earned. In addition, the asset is removed from the estate, reducing subsequent estate taxes. While the contribution is irrevocable, the grantor may have some control over the way the assets are invested, and may even switch from one charity to another (as long as it's still a qualified charitable organization). Charitable remainder trusts come in three types: charitable remainder annuity trust (which pays a fixed dollar amount annually), a charitable remainder unitrust (which pays a fixed percentage of the trust's value annually), and a charitable pooled income fund (which is set up by the church, enabling many donors to contribute). At this time we do not have a pooled income fund. For more information regarding charitable lead trusts and other beneficial trust instruments please contact your estate planning professional, accountant or attorney.