The Value of a Charitable Remainder TrustAre you interested in making a gift to the School of Arts and Sciences now but have put it off because of current financial responsibilities? Why not consider using a Charitable Remainder Trust (CRT) for your gift and do both at once? Not only will you be able to make a gift to SAS and maintain an income, but you will also receive several tax advantages.
How does a Charitable Remainder Trust work? You begin by transferring assets to a trustee, in this case the School of Arts and Sciences. As your trustee, SAS will act on your behalf and each year you, or someone you designate, will receive the income from the trust. This arrangement can be for either a limited time or for the rest of your life. When the trust ends, the assets pass to the School.
What about the income, how do the payments work? The payments are determined by the type of trust your create.
A Charitable Remainder Unitrust provides a variable income based on a percentage, determined by you, of the trust assets at the time the gift is made. An increase in the value of the trust over time is a good inflation hedge.
A Charitable Remainder Annuity Trust provides a fixed income each year. This amount must be at least 5 percent and is determined by you when your gift is initially made.
What are the tax benefits to establishing a Charitable Remainder Trust with the School of Arts and Sciences?