Beyond caring for yourself and your family, you want your money to count for something. You live with purpose, you give to your church, you give to the American Cancer Society, you volunteer, and you participate in fundraisers. What if I told you there was a mechanism for you to give to charity, while also providing you income for your retirement and creating tax benefits? This mechanism is called a charitable remainder trust.
What is a Charitable Remainder Trust?
The Charitable Trust Act provides the following definition:
“A Charitable Remainder Trust is one where the income goes to the donor or designated individual for life, with remainder to an operating charity on the death of the life tenant. The Trust must be irrevocable, as to the remainder, to fall within this regulation. Registration is required of all such trusts.”
A charitable remainder trust allows you to donate qualifying assets, such as cash, stocks, and real estate into the trust. Then, for a pre-determined term, you or a beneficiary of your choice will receive a partial tax deduction as well as annuity payments. When the trust expires, the remainder of the assets in the trust will then transfer to one or more designated charitable organizations.
What are the Benefits of a Charitable Remainder Trust?
- You can rest easy knowing that your valuable assets will go to the worthy charities that you designate. In doing so, you are cementing your legacy of giving.
- You or your beneficiary receives an annuity for the duration of the trust, which can effectively serve as a retirement fund that will allow you to continue to benefit from your assets and enjoy your retirement.
- Incredible tax benefits. Placing your stocks and real estate into the trust protects your estate against capital gains taxes when they appreciate. This ensures that both you and the charities receive maximum benefit of your assets without taxes depleting their value.
- You or your chosen charity will receive a charitable tax deduction. You will realize this deduction if your trust is established during your life, and you will be allowed to deduct the value of the remainder. The charity will be able to claim this deduction is your trust is established by your will, effectively allowing the assets to escape any estate tax.
I understand the importance of leaving our marks on the world. The Law Offices of Robert S. Thomas can help you establish a charitable remainder trust, or help you reach your philanthropic goals. I have assisted clients in the areas of estate planning and tax law for more than twenty years and few duties are more fulfilling to me. Call my office at 847-392-5893 today. Or please visit our website to set up a consultation.