A charitable remainder trust is a good choice if you want the option of reliable payments and have built a sizable estate. You may also qualify for tax benefits.
Benefits of a charitable remainder trust include:
- Potential for a partial charitable income tax deduction
- Potential for increased liquidity
- Up-front capital gains tax avoidance
There are two ways to receive payments with charitable remainder trusts:
- The annuity trust pays you or your loved ones, each year, the same dollar amount you choose at the start. Your payments stay the same, regardless of fluctuations in trust investments.
- The unitrust pays you or your loved-ones, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. The amount of the payments is redetermined annually. If the value of the trust increases, so do your payments. If the value decreases, however, so will your payments.