CHARITABLE REMAINDER TRUST

Charitable Remainder Trusts 

A TRUST IS A VEHICLE that holds legal title to assets which are managed by the trustee and distributed to your specification. A Charitable Remainder Trust allows you—or someone that you designate—to receive income from the trust for life, or a period of time you specify (not to exceed 20 years). At the end of the term, the remaining assets of the trust would be distributed to ALC in order to honor your charitable intent.

By placing assets in a Charitable Remainder Trust, you receive a tax deduction for the present value of the contribution in the year in which the gift is made. The trust then distributes income to you or your designated beneficiary for life or for the specified duration of the trust. After the specified trust term, the remainder of the trust is transferred to ALC. Many types of assets placed in a trust can be sold and reinvested by the trust, free of capital gains. This way, if you have assets that have increased in value, you could be generating more income in a tax-efficient manner.

CHARITABLE REMAINDER TRUSTS

  • Leave a permanent legacy supporting your commitment to land conservation.
  • Ensure your heirs receive lifetime income from your estate while the remainder goes to your choice of fund or issue area of interest.
  • Earn a full charitable deduction on estate taxes.
  • Create your bequest from a variety of assets.

A CHARITABLE REMAINDER TRUST is an ideal planned giving option if you would like to:

  • Leave the legacy of a long-lasting gift that supports your commitment to land conservation.
  • Make an irrevocable gift to charity.

A CHARITABLE REMAINDER TRUST allows you to receive income and other tax benefits, while leaving a legacy to support the issues you care about the most.

  • If an asset has increased in value but could be earning more income, a Charitable Remainder Trust can be an efficient vehicle for selling the asset and reinvesting the proceeds.
  • Through a Charitable Remainder Trust you or another beneficiary can receive distributions of a fixed amount, with the value of the trust (subject to income tax).
  • You can receive an income-tax deduction for the year the trust is established and up to 5 years thereafter, subject to certain limitations.
  • You may set the payment rate from the trust, subject to IRS regulations.

There are two main types of Charitable Remainder Trusts:

  • CHARITABLE REMAINDER UNITRUST – that provides you or another beneficiary with distributions of variable income based on a fixed percentage of the value of the Trust, based on annual valuation of the Trust principal.
  • CHARITABLE REMAINDER ANNUITY TRUST – that provides you or another beneficiary with distributions of a fixed percentage of the initial valuation of the Trust principal.

To learn more about Planned Giving with American Land Conservancy, please contact us at plannedgiving@alcnet.org or by phone at (415) 912-3660.