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Charitable Remainder Trusts

When you create a charitable remainder trust, you irrevocably transfer money, securities or other assets to a trust that will then pay you an income for life or for a designated period of years. You can design your trust to fit your own special needs and enjoy numerous benefits. For donors who, because of a sale of a business or other appreciated property, would otherwise face substantial capital gains taxes, this way of making a gift can be a perfect way to meet several goals.

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. 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.

Some additional information on charitable remainder trusts is also available. Charitable Remainder Trusts provide a good degree of flexibility that is valuable in charitable gift planning. For example, a variation on remainder trusts can be an effective way to make gifts of real estate.