Charitable Remainder Trust
Planning for the future — for you and your community.
Giving through a Charitable Remainder Trust allows you to receive income for the rest of your life, knowing that whatever remains will benefit your community.
You transfer assets into a trust, and the trust pays regular income payments to you or a beneficiary whom you designate. Upon the beneficiary’s death or after a defined period of years, the remaining assets in the trust transfer to the community foundation.
You may choose to receive a fixed income (a charitable remainder annuity trust) or one that changes with market conditions ( a charitable remainder unitrust) — and, income from the Charitable Remainder Trust you establish could add up to more than the interest and dividends you would have earned from holding the assets. You can use it to supplement your own lifestyle or that of someone other than yourself: a sibling, a dependent parent, a friend, or a former employee. You can begin receiving annuity payments immediately, or defer them to increase your charitable income tax deduction.
A portion of the income may be a tax-free return of principal, while some is taxed as ordinary income or capital gains. The amount of annuity paid and the tax deduction received depends on the age of the recipient and the current annuity rate (as established by the Internal Revenue Service).
You can pick one of these options for your Charitable Remainder Trust:
- Annuity trust pays you a fixed dollar amount.
- Standard unitrust pays you an amount equal to a fixed percentage of the net fair market of the trust and is recalculated annually.
- Net income unitrust pays you the lesser of the fixed percentage specified by the trust agreement or actual trust income; some net income unitrusts allow you to make up deficiencies in past years.
- Flip unitrust is a net income unitrust that converts to a standard unitrust upon a triggering event, such as the sale of an asset used to fund the trust.
Example Donor Story
A gift that pays.
"Doc" Dr. Robert C. Robinson was an eye physician and a long time supporter of the community foundation who knew that he wanted to someday make a difference in the lives of women and children who were involved with families experiencing crises. During his lifetime, he established a charitable remainder trust that paid him an income for life. At the time of his death, he named three charitable organizations that he had supported in life, to receive a 1/3 interest in the remainder. He asked that Our Community's Foundation use his gift to create a field of interest fund in his name that would make its annual grants available to organizations in the Mid-Ohio Valley serving women and children in crisis and families affected by domestic violence, forever.
There is so much more we’d like you to know. For more information and ideas on ways to integrate your financial planning with charitable giving, we suggest that you consult your personal professional financial advisor or contact our Executive Director at email@example.com or 304.428.4438 (toll free 1.866.428.4438).