A charitable remainder trust pays income to you and/or your designated beneficiaries for life or for a trust term of up to 20 years. The remainder passes to the Dance Evert Foundation.
Is this a good option for me?
You set the fixed rate to be paid to the beneficiaries, subject to IRS rules.
You benefit from an immediate income tax charitable deduction for a substantial portion of the trust.
You avoid capital gains taxes on the sale of appreciated assets by the trust, so funding with low-income, highly appreciated assets is ideal.
You choose the Trustee.
You support the Dance Evert Foundation by leaving it the remainder of the trust when it ends.
There are minimum amounts required to establish a charitable remainder trust.
Are there different types of charitable remainder trusts?
Yes, a charitable remainder annuity trust pays you a set dollar amount from the trust each year (usually a percentage of the trust’s initial assets). A charitable remainder unitrust pays you a fixed percentage of the trust assets as valued each year. This allows for more flexibility in determining the amount of income you receive each year. You may also make additional contributions to the trust. An annuity trust may not be added to.
What are my initial costs?
You will need to have an attorney draft and/or review the trust agreement. You will pay costs associated with such review and other advice offered by your attorney.
What are the ongoing costs?
The trust will bear annual administrative costs and trustee’s fees should you choose a person or financial institution to serve as Trustee. The amount of those costs can depend on whom or which institution you choose as Trustee.
What are my tax benefits?
You may claim an income tax charitable deduction for a portion of the trust assets. The amount of your deduction will depend on your age, the amount used to fund the trust, the fixed rate set out by you in the trust agreement, and the discount rate set by the Internal Revenue Service.
Do I pay tax on the trust income?
Usually, yes. The character of the income earned on the annual investment of the trust’s assets determines the type of tax to be paid (ordinary, long-term capital gain, tax-free).
How can I find out more or notify the Dance Evert Foundation of my charitable remainder trust?
Please contact Tom Evert at tom@dancevert.org.
This is not legal advice. Any prospective donor should seek the advice of a qualified estate and/or tax professional to determine the consequences of his or her gift.