Charitable Remainder Trusts
Goal: Secure payments for life while reducing market risks
Benefit: Potential increased income and tax benefits
Susan and Fred know what hard work is all about. And they have the rewards as a result.
Susan: "I was one of the lucky ones. Times were hard, but I got my education. 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 an education is, and we know how difficult it is for schools to develop the funding they need. Facilities, endowment, hiring the best teachers, scholarships - it's all literally urgent."
Susan: "We both benefited from our education - now we can give back. And what a joy it is to know that when we no longer need it, 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 young people and the educational community as a whole."
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. A graphic example of a charitable remainder trust is available. 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.
Susan and Fred are happy that they have made a difference; a difference that will have a profound impact on the lives of others.