Charitable Remainder Trusts
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Charitable Remainder Trusts

A charitable remainder trust enables a donor to make a gift that will provide a fixed rate of return for a predetermined amount of time. At the conclusion of the term, the remainder becomes a charitable gift to the American Friends of Meir Panim. With potentially positive tax implications, a charitable remainder trust offers an opportunity for you to make a significant contribution to American Friends of Meir Panim and enjoy secure income.

  • Potential for an immediate charitable deduction on your income taxes.
  • Possible avoidance of estate taxes on contributed assets.
  • Lock in a long term annuity for designated beneficiaries.
  • Remainder of the trust ultimately benefits American Friends of Meir Panim.
  • Potential for tax-free income.

 

The Charitable Remainder Annuity Trust

  • Fixed lifetime annuity at favorable rates.
  • Elimination of initial-tax on capital gain for contributed appreciated property.
  • Current income tax charitable deduction.
  • Avoidance of estate taxes pm contributed assets.
  • Potential for tax-free income; and opportunity to make a significant contribution to American Friends of Meir Panim.

 
The Charitable Remainder Annuity Trust is a way to avoid the fluctuation of interest rates and ensure fixed income for life. A gift of cash or appreciated property is used to set up the trust with Friends of Meir Panim either during a donor’s lifetime or through his or her will. This trust agreement locks in a long-term annuity rate, and donors or their designated beneficiaries receive regular annuity payments for life or a period of time not to exceed 20 years. 

A Charitable Remainder Trust pays an annual annuity, the rate for which depends on prevailing market conditions. The term of payment may extend through two or more lives, depending tax-planning considerations, and ultimately, the remainder in the trust becomes property of American Friends of Meir Panim. 

The Charitable Remainder Unitrust

Another type of Charitable Remainder Trust, referred to as a Unitrust, may be used to provide a variable payment, based upon a fixed rate multiplied against the revaluation of the trust each year. In an inflation period, when trust assets grow, the increasing value of the trust portfolio will result in larger annual payouts. 

If the property reverts to the donor, an income-tax deduction is created at the time the trust is formed. The income generated annually, however, must be recognized by the donor. In this instance, the Charitable Lead Trust enables the donor to shift the recognition and timing of income. Generally, however, these trusts are created to move assets to the next generation of a family at significantly reduced transfer-tax costs, and the income-tax deduction is of lesser importance.

  • Lifetime income at favorable rates.
  • Elimination of initial tax on capital gain for contributed appreciated properly.
  • Current income tax charitable deduction.
  • Avoidance of estate taxes on contributed assets.
  • Opportunity to make a significant contribution to American Friends of Meir Panim.

 

The Charitable Remainder Unitrust provides a way to obtain income for life that can grow as the funds invested in the trust grow. The Unitrust provides a variable payment, based upon a fixed rate multiplied against the revaluation of the assets in the trust each year. As trust assets grow, the increasing value of the trust portfolio will result in larger annual payouts.