A charitable remainder trust (CRT) is a way to both provide income to yourself or others and also make a charitable contribution. Recommended minimums vary from $100,000 to $250,000.

Benefits:

  • Retain an income stream
  • Receive income tax deduction
  • Avoid capital gains taxes
  • Potential to minimize estate taxes
  • Make deferred charitable gift/s
  • Especially favorable for those who have appreciated assets that provide little or no income

There are two types of CRTs:

1) Charitable remainder unitrust (CRUT): Pays the donor or others a designated percentage of the assets for a specified period of time, making the income
variable. Additional contributions are permitted.

2) Charitable remainder annuity trust (CRAT): Pays the donor or designee a fixed dollar amount for a specified period of time. All assets must be contributed
at inception, and no additional gifts are allowed. Payments are fixed, even if the value of the trust fluctuates.

Charitable lead trust (CLT) pays an income to the NCCF or a particular endowment for a specified number of years or until the donor’s death, when the
remainder is distributed to the donor, heirs or designee/s.

Benefits:

  • Can provide significant tax savings in both gift and estate categories if some trust income goes to charity for a few years
  • Can allow the donor’s family to receive more than inherited from an outright bequest if terms and payouts are established to neutralize gift tax
  • Can be an attractive vehicle for appreciating assets
  • Appealing to owners of assets that donors wish to pass intact to the next generation, such as a family vacation home

There are two types of CLTs:

1) Charitable lead unitrust (CLUT): Pays the NCCF or a particular endowment a designated percentage of the assets for a specified period, making the income variable. Additional contributions are allowed.

2) Charitable lead annuity trust (CLAT): Pays the NCCF or a particular endowment a fixed dollar amount for a specified period. All assets must be contributed at inception, and no additional gifts are permitted. Payments are fixed, even if the value of the trust fluctuates.

For more information about CRTs and CLTs, please contact Beth Boney Jenkins, NCCF’s Director of Development, at 919-828-4387. Professional advisors may contact Mary Morgan, NCCF’s Philanthropy Counsel, at 919-828-4387.

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