Office of Planned Giving

Charitable Remainder Trust

One method of making a gift with a retained right to income is a charitable remainder trust. Let's look at some of the benefits a charitable remainder trust can provide:

  • An income for you and/or your beneficiaries for life or a period of up to 20 years.
  • An immediate and substantial income tax charitable deduction (subject to the annual AGI limitations).
  • No capital gains owed on the transfer of long-term appreciated property to the trust.
  • Reduction of your estate to avoid or reduce death taxes.
  • Substantial reduction of probate costs, taxes, and other estate transfer expenses.

An Immediate Charitable Deduction

A gift to a charitable remainder trust generates an immediate income tax deduction, even though income is to be paid to the donor (and/or other beneficiaries) for life. The exact amount of the charitable deduction depends on the:

  • value of the property transferred to the trust
  • amount of income benefits that are payable each year to individual beneficiaries
  • approximate length of time the income benefits will be paid
  • interest rates prevailing at the time the gift is made

Despite the tax and financial benefits of a charitable remainder trust, you should consider this kind of arrangement only if you and your advisors determine it is compatible with your overall estate, tax, and financial plan.

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