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Charitable Trusts

Learn About Charitable Trusts

Providing a legacy of stewardship.

Charitable Trusts

A Charitable Trust provides for generous support for ministry while the donor receives tax benefits. There are two main types of Charitable Trusts, based primarily on whether the support to ministry occurs at the completion of the trust, or at the onset of the trust.

Charitable Remainder Trusts

A Charitable Remainder Trust is an extremely popular option that allows you to receive income payments for you and your family while enjoying immediate tax benefits. At the completion of the trust, you’ll have the joy of giving to the ministry of your choice.

Charitable Lead Trusts

A Charitable Lead Trust is an excellent tool if you are looking for a way to pass on assets to your family while reducing or eliminating gift or estate taxes.

Charitable Trusts

A Charitable Trust provides for generous support for ministry while the donor receives tax benefits. There are two main types of Charitable Trusts, based primarily on whether the support to ministry occurs at the completion of the trust, or at the onset of the trust.

Charitable Remainder Trusts

A Charitable Remainder Trust is an extremely popular option that allows you to receive income payments for you and your family while enjoying immediate tax benefits. At the completion of the trust, you’ll have the joy of giving to the ministry of your choice.

Charitable Lead Trusts

A Charitable Lead Trust is an excellent tool if you are looking for a way to pass on assets to your family while reducing or eliminating gift or estate taxes.

A Quick Guide to Trust Types

Charitable Remainder Trusts and Charitable Lead Trusts offer unique benefits and have different requirements.

To establish a Charitable Remainder Trust, assets are transferred to AG Foundation which, in turn, pays you income according to the terms of the trust. You can receive lifetime income payments for yourself and a spouse, and up to 20 years to third parties, such as children. 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 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. The funding of the trust creates an immediate charitable tax deduction, and property sold through the trust avoids imposition of upfront capital gains. Minimum required funding is $50,000 for cash or securities, or $100,000 for real estate.

A Charitable Lead Trust functions in somewhat the opposite way of a Charitable Remainder Trust. You make a contribution of cash or property to fund the irrevocable trust. The trust makes income payments to the ministry for a set number of years. You receive a charitable deduction for the gift. Upon completion, the asset then returns back to you or transfers to your family along with any additional growth in value.

These are best funded with cash, income-producing securities, real estate, or other assets. Minimum required funding is $50,000 for cash or securities, or $100,000 for real estate. A Charitable Lead Trust does not have capital gains benefits, and income generated by the trust may be taxable to you. However, this type of trust can also be useful in reducing taxes on large estates and making tax-advantaged transfers to your children.

Options Overview

Charitable Remainder Trust

Charitable Remainder Unitrust (CRUT)

  • Annual payout is determined by donor
  • Account balance is revalued at the beginning of each year
  • Minimum required payout of 5%
  • Income may fluctuate from year to year

Charitable Remainder Annuity Trust (CRAT)

  • Donor receives a fixed payment
  • Payment can be based on life expectancy or term of years
  • Payments may begin immediately upon funding

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Charitable Lead Trust

Grantor Lead Trust

  • Donor receives remainder of trust after stated period of time
  • Charitable income tax deduction (equal to the total value of the income payments to ministry) is given in the year the trust is created
  • Donor is taxed on the trust's income each year

Non-Grantor Lead Trust

  • A named beneficiary, ministry, or heirs receive remainder of trust after predetermined payout period
  • Permanent transfer of asset
  • Reduces gift or estate tax and removes asset from estate
  • Income is taxed at the trust level each year

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