Charitable Remainder Trust
GOAL: Establish a gift plan now that will provide me with income and some immediate tax benefits
"I need to receive an income from my assets for the rest of my life, or for a period of time, but I want to establish a specific gift plan for George School now that will provide me with income and some immediate tax benefits."
METHOD: Establish a Charitable Remainder Trust. (Also see: Charitable Gift Annuity and Pooled Income Fund)
FREQUENTLY ASKED QUESTIONS ABOUT CHARITABLE REMAINDER TRUSTS
WHAT IS A CHARITABLE REMAINDER TRUST? You create and fund an irrevocable trust that provides income to yourself, your spouse, and/or other beneficiaries for life, or for a term of years, after which the "remainder" of the trust is distributed to George School (or to George School and other charitable organizations).
RETURN TO TOP WHAT ARE THE PERSONAL BENEFITS OF A CHARITABLE REMAINDER TRUST? A Charitable Remainder Trust is particularly beneficial if you want to make a gift of over $100,000 to George School, while:
- Retaining, and possibly even increasing, income from your gift during your lifetime and those of others,
- Deriving certain tax benefits, including an income tax deduction and capital gains deferral or avoidance on the contributed assets,
- Diversifying your asset portfolio.
RETURN TO TOP WHAT TYPES OF ASSETS ARE COMMONLY USED TO ESTABLISH A CHARITABLE REMAINDER TRUST? Usually readily marketable, appreciated securities. But other appreciated property, like real estate, closely held stock or valuable personal property, may also be used to fund a Charitable Remainder Trust.
RETURN TO TOP ARE THERE DIFFERENT KINDS OF CHARITABLE REMAINDER TRUSTS? Yes. There are a two: The Charitable Remainder Annuity Trust and the Charitable Remainder Unitrust.
The Charitable Remainder Annuity Trust is the appropriate choice if you prefer the reassurance of an unchanging, fixed income from your trust. For those owing highly appreciated stocks with little or no dividend income, the Charitable Remainder Annuity Trust provides a capital gains free method of converting this stock portfolio into a fixed income instrument, while making a significant gift to George School and receiving other income tax benefits.
The Charitable Remainder Unitrust, which provides income based on a percentage of the market value of the trust revalued annually, allows the income you receive to at least keep pace with inflation as the market value of the trust increases over time. A Unitrust, however, provides no guarantee that your income will increase; the income could remain the same or decrease.
RETURN TO TOP WHO SHOULD I CONTACT REGARDING A CHARITABLE REMAINDER TRUST? For more information, and a personalized illustration of a Charitable Remainder Trust, contact Director of Planned Giving Andy Popkin at
GSPlannedGiving@georgeschool.org or call him directly at 215.579.6563.
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