How would you like to generate income for your family, lower your taxes, and donate to your favorite charity? It can all be done with charitable remainder trusts.
Charitable remainder trusts are irrevocable structures established by a donor to provide an income stream to the income beneficiary, while the public charity or private foundation receives the remainder value when the trust terminates.
These "split interest" trusts are normally tax-exempt. A Charitable remainder trust makes its payments, either of a fixed amount or a percentage of trust principal, to whomever the donor chooses to receive income. Normally, the donor may claim a charitable income tax deduction, and may not have to pay an immediate capital gains tax when the charitable remainder trust disposes of the appreciated asset and purchases other property as it diversifies its portfolio of trust property. At the end of the trust term, which may be based on either lives or a term of years, the charity receives whatever amount is left in the trust.
Charitable trust funds may be set up inter vivos, during a donor's life, or as a part of a trust or will at death, as testamentary. US charitable trust funds vary primarily in two factors: firstly whether the charity is paid first (and the remainder, after trust termination, goes to beneficiaries, such as heirs or back to the donor) – a "charitable lead trust", or whether the charity is paid last (after termination of the trust, after other beneficiaries have received payments) – a "charitable remainder trust"; and secondly whether the payments are a fixed amount "annuity trust", or a percentage of principle "unitrust".
Forming a charitable trust can be an effective strategy for planning for retirement. Interested in learning more about a charitable remainder trusts? Give NCH a call at 1-800-508-1729.
*Legal Disclaimer – Nevada Corporate Headquarters, Inc. has prepared the content of this website for informational purposes only. It is not legal advice. Our legal services are provided by an in-house independent Nevada law firm.*