Planned Giving
Charitable Trusts
There are several kinds of Charitable Trusts, three of which will be discussed here.
The Charitable Remainder Annuity Trust (CRAT): Highly appreciated, low yield property may be transferred into a living remainder annuity trust. The individual selects an annuity amount or a percent of the initial fair market value that will be paid for one or two lifetimes or a time period up to twenty years. The annuity amount will be fixed and will not change regardless of the value of the trust principal or the return of the trust. The charity receives the trust principal after all income payments have been completed.
The Charitable Remainder Unitrust (CRUT): Similar to the CRAT, but the amount paid is equal to a set percentage of the trust assets as valued annually. Payments may thus vary with the performance of the assets in the trust. After all of the income payments have been completed, the remainder is distributed to qualified charities.
The Charitable Lead Trust: Property is transferred into a trust permitting a variable or fixed amount to be distributed each year to the selected charity for a chosen number of years. At the end of the chosen term of years, principal is returned to the donor or distributed to family members.
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