AG Financial Solutions

Charitable Trusts

Charitable Remainder Trust

A charitable remainder trust allows you to sell—on a tax-advantaged basis—appreciated assets such as real estate, securities, businesses, or other appreciated assets while providing a customized income solution to designated beneficiaries.  At the end of the trust, the remaining assets in the trust are directed to the ministries of your choice.

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Charitable Lead Trust

A Charitable Lead Trust is an irrevocable trust designed to receive property and then pay income from that property to a ministry for a number of years or for the life of the donor. Upon the completion of the trust term, the property can return to the donor or transfer to the donor’s family. A charitable lead trust effectively creates a “temporary gift” of an asset, generating a charitable deduction for the donor for all income paid from the trust to the ministry during the course of the trust’s life. A charitable lead trust does not have capital gain avoidance benefits, and income generated by the trust can be taxable to the donor, but a charitable lead trust can be useful to reduce estate tax on large taxable estates and to make tax-advantaged transfers to children.

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FAQs

Q: What is a Charitable Remainder Trust?

A: A Charitable Remainder Trust is an irrevocable trust designed to receive property, whether it be cash, securities, appreciated real estate, or other marketable assets, and then convert that property into an income payment that can continue through the life of the Donor(s) and up to twenty (20) years to third parties. The funding of the trust creates an immediate charitable tax deduction, and property sold through the trust avoids imposition of upfront capital gains. During the term of the trust, income payments are payable to named parties in either fixed or annually adjustable amounts, and upon the termination of the trust’s term, the remainder of the trust principal is transferred to a named charity or donor advised fund. A Charitable Remainder Trust is an excellent alternative to an outright sale of appreciated securities, real estate or other marketable assets due to its charitable and capital gain tax benefits, but it can also be funded with cash to achieve a charitable tax deduction.

Q: How do people usually make charitable bequests?

A: Many simply designate a percentage of their estate to go to the charitable organization of their choice. Others name one or more charities as final beneficiaries to receive whatever remains in the estate after other heirs are provided for. Through the Testamentary Services program of AG Financial Solutions, you can designate a portion of your estate to the charities and ministries of your choice with at least ten percent of your estate going to an Assemblies of God church or ministry, and you also have the opportunity to list those organizations as your final beneficiaries in case your spouse and direct descendants fail to survive you.