Charitable Trusts

If you need current income or future income for your retirement years, a charitable remainder trust can provide income to you for your life or for a term of years not to exceed 20. You will also qualify for a current income tax deduction and avoid the capital gains tax on the property used to fund the trust.

To establish a charitable remainder trust, the donor creates a trust and transfers assets, such as cash, securities or real estate, to it. The trust pays the donor, or other non-charitable beneficiary, an income for life or for a term of years (not to exceed 20). The pay-out from the trust must be at least 5%. Upon the death of the income beneficiary or the expiration of the term of years, the trust ends and the principal passes to Safe Harbor Support. The donor can often avoid capital gains tax, increase income, and save estate taxes.

There are two basic types of charitable remainder trusts:

Unitrust - The annual income received is variable, based upon a fixed percentage of the fair market value of the assets of the trust, as re-valued each year. There are other income variations available with this type of trust and additional contributions can be made to the trust. It is a highly flexible financial planning instrument.

Annuity trust - The annual income is a fixed percentage of the trust's initial value and provides income of a fixed dollar amount. Additional contributions to the trust cannot be made.

For additional information about planned giving options, contact Karla Whelchel at 480-214-5728 or request information online.