Learn About Charitable Trusts
Providing a legacy of stewardship.
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.
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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