Charitable Remainder Trusts

A charitable remainder trust provides the most flexibility and potentially the greatest tax savings of CFWNC’s planned giving options.

What Is a charitable remainder trust?

A charitable remainder trust is a lump-sum gift to CFWNC, from which donors or their designated beneficiaries receive annual payments. These payments may be either fixed or based on a specified percentage of the trust’s changing value, as specified by the donor. Once the beneficiary(ies) are deceased, the remainder of the trust is added to a fund at The Community Foundation, created or selected by the fundholder.

There are two kinds of charitable remainder trusts, defined by the payment option you select:

  • An annuity trust pays a fixed dollar amount each year, equal to at least 5% of the value of the assets placed in trust. ($500,000 placed in trust will generate $25,000 in annual income, regardless of market conditions.)
  • A unitrust pays a set percentage (at least 5%) of the value of the trust’s assets as recalculated each year. Payment amounts will increase or decrease with the annual market value of the trust’s assets.

What are the advantages?

  • Charitable remainder trusts allow you to make larger gifts than might otherwise be possible, and often increase your income in the process.
  • The donor retains a lifetime income stream generated by the trust.
  • Trust payments are made over a lifetime, successive lifetimes or a term up to 20 years.
  • Receive an immediate tax deduction for your gift, determined by the age of your beneficiary(ies), the value of the assets placed in trust and the size of the payout you select.
  • Enjoy significant capital gains tax reductions when you fund your trust with appreciated property.

How do I create a charitable remainder trust?

Establishing a charitable remainder trust is a significant step in your financial, charitable and estate planning. The Community Foundation will work with you and your professional advisors – attorney, accountant and financial advisor – to create a trust that achieves your goals.

Contact our Development Staff for more information.

A charitable remainder trust can unlock the value of appreciated assets for you during your lifetime and for your charitable interests forever.