What is a Charitable Remainder Trust?

 

Charitable Remainder Trusts are “split-interest” gift vehicles, splitting the benefits of a charitable gift so that you and your family receive the income for life or the term of the trust, and the remainder is transferred to charity at the trust’s termination.

There are a number of different types of Charitable Remainder Trusts, but they all share the following characteristics:

  • 1. The donor(s) establish a trust and contribute assets. Contributions:
    • -avoid capital gains taxes, (Due to the benefits of capital gains avoidance, contributions to a Charitable Remainder Trust are typically highly-appreciated assets.)
    • -are eligible for an income tax deduction, based on the present value of the charity’s interest in the trust, and
    • -may be effectively removed from the donor’s estate.
  • 2. The trust generates income for one or more people, for their lifetimes or for a fixed period of years.
  • 3. At the termination of the trust, the remainder is distributed to charity.
 
How it works
 

* Income may also be distributed to the donor’s family or other beneficiaries. Note however, that the choice of income beneficiary may have gift and/or estate tax consequences.

** The benefit of naming an account with a donor-advised fund as the beneficiary of a CRT, as opposed to naming another type of charitable organization, is that you can change the ultimate charitable beneficiaries of the account at any time and/or name your family as successor-advisors to the account to support the causes they value in the future.

  

Call a Donor Relations Specialist:
(800) 746-6216
Monday to Friday, 11am - 8pm ET

You may also contact us via email to ask questions or to request printed materials.