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Charitable Remainder Trusts: Getting Started

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Calculate Your Benefits
With a charitable remainder trust, you can receive income each year for the rest of your life from assets you give to the trust you create. Your income can be either variable or a fixed amount. After your lifetime, the balance in the trust goes to the charities of your choice.


Charitable Remainder Trust
You
You
1
You give cash or property to the trust.
2
You receive an income tax deduction and named individuals receive income for life.
Charitable Remainder Trust
3
Remainder goes to the University of Minnesota Foundation after your lifetime.
University of Minnesota Foundation

Your Possible Benefits
  • A partial charitable income tax deduction
  • Potential for increased income
  • Up-front capital gains tax avoidance
  • Professional management of trust assets available

Choose Between Two Main Types
There are two types of charitable remainder trusts:

The annuity trust pays you, each year, the same dollar amount you choose at the start. Your payments stay the same, regardless of fluctuations in trust investments.

Example: Elizabeth, 76, owns several stocks worth $100,000 that currently pay dividends of only $2,000 a year. She decides to give these stocks to a charitable remainder annuity trust. She will qualify for a partial income tax deduction of $52,754,1 receive $5,000 a year and provide a future gift to a qualified charitable organization.

eBrochures Get your free guide on annuity trusts.
Gift Calculator Calculate your possible benefits with a charitable remainder annuity trust.


The unitrust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. The amount of your payments is redetermined annually. If the value of the trust increases, so do your payments. If the value decreases, however, so will your payments.

Example: Larry, 65, was looking for a gift vehicle that keeps up with inflation and provides extra income during retirement. He decides to give $1 million to a unitrust that will pay him 6 percent of the trust assets each year. Larry will also qualify for a partial income tax deduction of $389,8101 and provide a future gift to a qualified charitable organization.

eBrochures Get your free guide on unitrusts.
Gift Calculator Calculate your possible benefits with a charitable remainder unitrust.


To learn more about how you can support University of Minnesota through a trust, contact Planned Giving at 612-624-3333 or 800-775-2187 or plgiving@umn.edu.

1Based on annual payments and a 1.4 percent charitable midterm federal rate.


Copyright © The Stelter Company, All rights reserved.

The information on this website is not intended as legal or tax advice. For legal or tax advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes apply to federal taxes only. State income/estate taxes or state law may impact your results.

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