Charitable Remainder Trusts
Are you thinking of cashing in some of your stocks or mutual funds? Do you have a vacant lot, a vacation home, farm, or some other piece of real estate you no longer need? Whether securities or real estate, if you've owned the asset for more than a year and the value is higher than your cost, you may want to consider placing the property in a charitable trust. (minimum $50,000)
The trustee of a charitable trust can sell appreciated assets without incurring tax on the capital gain. Then the entire proceeds, less closing costs, are invested to provide a flow of income to you and/or your family as income beneficiary(ies) of the trust. At the end of the trust, normally upon the death of the income recipient(s), whatever is left will then be distributed to the charity(ies) you name in the trust.
Were you to sell your property yourself a significant amount of the sale proceeds could be lost to taxes. But with a charitable trust, the full proceeds are invested to meet the goals of the trust. Think of the extra income this could mean to you during your lifetime. The beautiful thing is that you can make a deferred gift to Heifer and still provide income for yourself and your family. You also get an immediate income tax deduction and avoid capital gains tax and save estate tax.
Trustor is the person who creates the trust.
Recipients are beneficiaries of the trustor's generosity.
Understandings are written in the document that says how the trust will function.
Substance is an asset placed into the trust.
Trustee is the person or organization that oversees the trust.
What Assets Can I Use?
- Cash & Personal Property
- Stocks & Bonds
- Livestock
- Real Estate
- Family Business
- Retirement Plans & Life Insurance
Want to run a Charitable Remainder Trusts calculation?
Click here to get the calculator.
