CHARITABLE REMAINDER TRUST

This Estate Planning vehicle is most efficient for a donor holding assets that have experienced significant appreciation.  The individual’s appreciated assets are placed in the Trust. The donor can manage the assets if they want, or the donor (or the Holy Names Sisters Foundation) can obtain a professional trust manager to manage the assets, such as a Trust Department in a bank. A 5% minimum income is required to be paid to the income beneficiary annually.  A binding legal contract acts as the Trust document. Through a Charitable Remainder Trust, the principal continues to grow depending on the income needed by the donor.  In addition, the donor receives a tax deduction based upon an IRS formula.

There are two ways to establish a Charitable Remainder Trust:

• A Charitable Remainder Annuity Trust (CRAT) - assures a fixed return for the rest of the donor’s life, regardless of investment performance.  Income distribution is mandatory and principal may be invaded to satisfy the requested payout. No additions to the principal may be made after the Trust is established.
   
• A Charitable Remainder Unitrust (CRUT) - is more variable; the donor receives a fixed percentage of the fair market value of the principal for the rest of his/her life. As the principal grows, so income for the donor grows.  Another benefit of the CRUT is that it allows for additional contributions to be made after the Trust is established.

With the CRAT or CRUT, the principal ultimately is gifted to The Holy Names Sisters Foundation and/or other charities upon the donor’s death. Because the principal continues to grow over the years, the final gift given to the charity(s) can be much greater than the initial principal, thereby increasing the impact by the donor upon the charity(s) future work.

For more information regarding gift-planning options, please contact us.

Information provided on our Internet site is not intended to be tax or legal advice. Please consult a qualified financial advisor before making a gift.