Charitable Remainder Trusts

A charitable remainder trust can be a powerful estate-planning tool. It is a life income gift that enables you to give today for an immediate tax saving while continuing to receive the income from the donated asset.

It is an ideal gift for donors who want to give cash, securities, or real estate to Knowledge, but who currently depend on the income these assets generate. Charitable remainder trusts are ideal for donors who are 65 years of age or older.

Q: How do I receive income for life?

A: In essence, you transfer a property (such as investments, real estate, etc.) in trust, and reserve an annuity interest in the property for the benefit of yourself, your spouse, and/or other beneficiaries.

You contribute the remainder interest in the property to Knowledge. Instead of making a bequest in a will, you have made an immediate gift of the remainder interest in the property in trust to Knowledge, and you retain an annuity income interest for life.

Q: What is the allowable tax credit I can receive?

A: In the year of the gift, a tax receipt is generated based on the cash amount or market value of the property, the age of the donor, and current interest rates. This is often referred to as the “present value.”

Q: What are the benefits of a charitable remainder trust versus a bequest to Knowledge?

A: Charitable remainder trusts are not included in the value of your estate, thereby avoiding probate fees that would otherwise apply to your estate.

With a charitable remainder trust, your gift is confidential and cannot be challenged in court, but a bequest can be challenged in court. Also, under the trust arrangement, there is no delay in payment to the charity, whereas bequests can take considerable time to settle.

Errors and omissions excepted.