Getting Started

With a charitable remainder trust, you can receive income each year for the rest of your life from assets you give to the trust you create. Your income can be either variable or a fixed amount. After your lifetime, the balance in the trust goes to the charities of your choice.

Your Possible Benefits

• A partial charitable income tax deduction
• Potential for increased income
• Up-front capital gains tax avoidance
• Professional management of trust assets available

Choose Between 2 Main Types

There are two types of charitable remainder trusts:

The annuity trust pays you, each year, the same dollar amount you choose at the start. Your payments stay the same, regardless of fluctuations in trust investments.

Example: Elizabeth, 76, owns several stocks worth $100,000 that currently pay dividends of only $2,000 a year. She decides to give these stocks to a charitable remainder annuity trust. She will qualify for a partial income tax deduction of $46,587* receive $6,500 a year and provide a future gift to a qualified charitable organization.

The unitrust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. The amount of your payments is redetermined annually. If the value of the trust increases, so do your payments. If the value decreases, however, so will your payments.

Example: Larry, 65, was looking for a gift vehicle that keeps up with inflation and provides extra income during retirement. He decides to give $1,000,000 to a unitrust that will pay him 6 percent of the trust assets each year. Larry will also qualify for a partial income tax deduction of $396,140* and provide a future gift to a qualified charitable organization.

*Based on annual payments and a 3.4 percent charitable midterm federal rate.