Should I consider charitable giving?
A charitable remainder trust is a wonderful way to make an impact and create a reliable payment stream
for you and/or the beneficiaries you select. A charitable remainder trust (CRT) can be funded with a wide
range of assets, including securities, cash or real estate. A CRT provides annual payments to you and/or
other beneficiaries you designate for life or for a selected term of years. You can decide how often you
want to receive your payments when you establish your trust. At the end of the trust term, the assets
remaining in the trust will be distributed to the charity for the purposes you designate.
- If you establish a CRT, you may receive a current charitable income tax deduction, a bypass of
capital gains tax on appreciated assets, and a reduction in estate taxes. You and your
beneficiaries will receive regular payments from the trust for the entire trust term. Payments
typically range between 5% and 7%.
- If you establish a charitable remainder annuity trust (CRAT), your annual payment will be a fixed
percentage of the initial value of your trust. Your trust "annuity" payment will not fluctuate from
year to year based on market performance, and you will receive a predictable payment stream
during the trust term.
If you instead establish a charitable remainder unitrust (CRUT), your annual payment will be a fixed
percentage of the trust's principal as it is revalued each year. Thus, your "unitrust" payment will increase
when the trust value increases, allowing you to benefit from strong market performance, but will decrease
if the trust value decreases.