Charitable Remainder Trusts
Charitable Remainder Trusts (CRTs) are designed to enable you to continue receiving the earnings from your assets for life, without management worries, and after death, to make a significant gift to a charitable organization such as Glenmary. There are two types of tax-favored CRTs: the annuity trust and the unitrust.
The choice of an annuity trust or a unitrust depends primarily on your economic circumstances and timeframe.
In an annuity trust, you receive the same fixed amount each year. This is advantageous when you want to be certain of the dollars received year to year. If you are concerned about the possibility of recessionary times and falling market values, the annuity trust has greater appeal. Although you can't add to this annuity trust later in order to increase income, you can always create a new trust for that purpose.
In comparison, a unitrust may be a hedge against inflation. If you foresee economic growth resulting in appreciation of the trust's assets, a unitrust is the best option. Although the valuation can rise or fall, over time a well-managed unitrust may offer better protection of purchasing power than fixed dollar payments. A further advantage to a unitrust is the ability to make additional contributions to increase the amount of the trust later without incurring the costs of creating and administering more than one trust.
Significant Tax Benefits of a CRT
- When a trust is funded, you immediately obtain the benefit of a sizable income-tax charitable deduction. The older the beneficiary (and the lower the income payout), the greater the charitable deduction.
- You can fund a charitable remainder trust with cash, securities or other property. Highly appreciated assets that generate low current income are an ideal funding medium since they do not incur capital gains tax.
- You are freed of asset management worries and the day-to-day concerns of investing for needed income. You and/or your surviving spouse are free of similar concerns in the future when ill health or other factors may complicate estate management.
- There may be significant estate tax advantages for you. Charitable gifts made through charitable remainder trusts are effectively excluded from and, therefore, not taxed in your estate at death.
Other Kinds of Trusts
Charitable Lead Trust
The Charitable Lead Trust is a trust arrangement that pays income to Glenmary for a specified period of years, with the trust principal reverting to you or your family when the trust ends. Trust income is similar to an outright gift of cash that Glenmary can use as soon as it is received, subject to any of your restrictions. A trustee administers Charitable Lead Trusts.Among the benefits for high-net-worth donors who consider this planned gift option are:
- Charitable tax deduction consideration
- Maximizing your assets for both Glenmary and your estate
- Reduced administration
- Balancing your charitable interests with those of your loved ones.
The Charitable Lead Trust is probably the most sophisticated of all the planned giving instruments. It is advisable for you to seek the assistance of an experienced charitable estate planner before entering into this type of arrangement. Glenmary's Planned Giving staff can assist when requested.
Glenmary Revocable Trust
A Glenmary Revocable Trust may be attractive to you if you want to make large gifts of cash or securities but hesitate to do so due to changing financial circumstances.
This flexible giving plan is a contract between you and Glenmary. The agreement requires that you transfer assets to Glenmary. Glenmary, in turn, makes quarterly payments to you. You receive an annual 1099-INT for agreement income received.
The revocable agreement contains no tax advantages for you but provides the opportunity to support Glenmary's mission and ministry while receiving an income for your lifetime.
When you die, the agreement shall terminate and Glenmary will use the gift for furthering it's home mission ministry.
This agreement has a minimum amount of $2,000. There is no minimum age and can only be for an individual.
In a Testamentary Trust, you could establish a trust to take effect upon your death, which would provide payments to your spouse or other surviving relative for life, after which Glenmary would receive the trust assets to further its work.
While living, you have full use of and access to the property. Further, you have the satisfaction of knowing that your loved one will receive payments for life with no management worries, and that at your loved one's death, Glenmary will receive a substantial gift for its ministry in the U.S. home missions.
If you have any questions about trusts or any other planned giving option, please contact Susan Lambert, Glenmary's planned giving officer, at 800.935.0975. Also, if you have remembered Glenmary in your will or trust, please contact us so we can have the pleasure of thanking you now!