Planned Giving Through Charitable Remainder Trusts

Planned Giving

Planned giving allows you to manage your wealth while blessing the ministries you feel called to serve. Through a unique marriage of stewardship and financial planning, it allows you to reach your goals for yourself, family, and ministry. There are several planned giving options available. This article will focus on Charitable Remainder Trusts.

A Charitable Remainder Trust (CRT) is an extremely popular option that allows you to receive income payments for you and/or your family—and enjoy immediate tax benefits. In addition, you’ll have the benefit of giving to the ministry of your choice at the completion of your trust.

To establish the trust, assets are transferred into the CRT, which then pays you income according to the terms of the trust. You can receive lifetime income payments for yourself and a spouse, and possibly up to 20 years to third parties. Upon completion of the trust’s term, the remainder of the trust’s principal is transferred to the ministry of your choice.

A Charitable Remainder Trust is an irrevocable trust, which may offer immediate tax benefits and assures your wishes will be carried out. Income paid out by the trust is taxable to the income beneficiary.

One of the most appealing benefits of the Charitable Remainder Trust is your ability to create a personalized plan according to your needs. Income payments can be fixed or in annually adjusted amounts. These payments can fluctuate and grow based on terms and investments. And you can choose the ministry or ministries, as well as levels of giving each receives.

A Charitable Remainder Trust is ideal if you:

  • Want a customized income plan for yourself, your spouse, and/or your children
  • Desire potential capital gains tax savings
  • Want an immediate income tax deduction
  • Have appreciated stock, real estate, or business interests
  • Are preparing for a life or financial transition
  • Have a moderate to large taxable estate
  • Wish to give to ministry
  • Plan to sell appreciated assets (business, real estate, etc.)

Charitable Remainder Trusts can be funded with cash, real estate, business interests, antiques, art, and other assets. Minimum required funding is $50,000 for cash or securities, or $100,000 for real estate. There are two options available for CRTs: Charitable Remainder Unitrust (CRUT) and Charitable Remainder Annuity Trust (CRAT). Speak with a planned giving consultant to determine which option is best for you and your needs.

Planned giving provides unique benefits to the donor. The different options available allow you to create a custom financial plan that will fit your unique needs and circumstances while providing for your family and blessing others.

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