Charitable Remainder Trust

Give and Receive Income with a Charitable Remainder Trust

Similar to a charitable gift annuity, with a charitable remainder trust you make a gift and receive lifetime income. But because it is a tax-exempt entity, capital gains tax is avoided when appreciated assets are transferred to the trust and when they are sold by the trust. As a result, the full market value of the asset is put to work first for you and ultimately for the Adler School. In addition, you receive an income tax charitable deduction for a portion of the trust funding amount, which can be used immediately to save on income taxes.

How it works:

  • A trust is set up and the funding assets are transferred to it.
  • You choose a trustee or possibly serve in that role yourself.
  • You as the donor choose the income beneficiaries of the trust. It can be you and/or loved ones, friends or others (most commonly you and your spouse). The trustee manages the trust assets and pays income each year to these beneficiaries.
  • The amount paid to income beneficiaries may be fixed (the same amount each year, offering the security of fixed payments) or variable (based on a percentage of the trust value, offering the possibility that payments may grow over time).
  • When the trust term ends (usually upon the passing of the income beneficiaries), the amount remaining in the trust is distributed by the trustee to the Adler School for use as you directed.

Please note: In the case of Canadian supporters, charitable gift annuities and charitable remainder trusts feature somewhat different characteristics and tax benefits.

Charitable Remainder Trust Example:

A Charitable Remainder Trust can be tailored to your needs:

  • Increase cash flow
  • Provide supplemental retirement income
  • Provide for other family members
  • Preserve your children’s legacy