CHARITABLE REMAINDER TRUSTS
A charitable remainder trust is a defined term plan in which you, the donor, contribute assets of various types to the trust which then provides income to you for a fixed period of time. The assets are transferred to Anderson Animal Shelter upon the conclusion of the defined period of time for which the trust was established. The two basic types of charitable remainder trusts (CRT’s) are Unitrust (CRUT) and Annuity Trust (CRAT).
The Unitrust (CRUT) pays out a variable annual income that is based on a fixed percentage of the total trust’s assets. These assets are revalued every year based on any appreciation or depreciation that the trust experiences. You are allowed to make additional contributions to this type of trust at any time which can be an added benefit. You are entitled to an immediate income tax deduction for a portion of your contribution to the unitrust. You are not required to pay any capital gains tax on any donated appreciated assets. The principal of the trust is transferred to Anderson Animal Shelter upon the termination of the trust.
The Annuity Trust (CRAT) pays out a fixed annual income that is set when the trust is established. You are not allowed to make any additional contributions to this type of trust once created. You are entitled to an immediate income tax deduction for a portion of your contribution to the annuity trust. The principal of the trust is transferred to Anderson Animal Shelter upon the termination of the trust.
There are many benefits to charitable remainder trusts with the main one being that you will have the knowledge and enjoyment of making an important gift which will benefit Anderson Animal Shelter later and you currently. Remember to please consult with your professional advisors to determine which method might be the best one for you to employ.
All material detailed in this website is intended only for general educational purposes on the subjects listed within and is not represented as legal, financial or tax advice. Please contact your own professional legal, tax and financial advisors for advice concerning these subjects as they relate to your own personal situation.