After you decide who should serve as your trustee, work with your attorney to follow these five steps to create a charitable trust that fits your financial needs.
Decide which assets you'd like to put into the trust. Donating appreciated, low-yield stock or real estate you've owned longer than one year is typically more advantageous than giving cash. You may boost your cash flow by means of a higher payout from the trust. And you'll escape up-front tax on the asset's capital gain.
Determine who you want to receive the payments and how much. The rate you select must be at least 5 percent. Usually, the rate selected is 5 percent to 7 percent. Also consider whether you want someone else to receive payments, too.
Consider how long you'd like the payments to last. Would you like to receive payments for your lifetime (or the lifetime of another beneficiary) or for a fixed number of years, up to 20?
Decide which type of charitable remainder trust will work best for you. You can choose to receive payments that vary from year to year (unitrust) or steady payments (annuity trust). Choosing a unitrust allows you to make gifts of additional assets into your unitrust at any time in the future.
Decide which charities you'd like to receive the balance of the trust after your lifetime (or the fixed term). Please let us know if you include Auburn University in your trust so we can thank you for your generosity and support of our mission.
We are happy to work with you and your tax and legal advisors to ensure your charitable trust meets your goals.
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.