Planned Giving
Charitable Remainder Trusts
Basic Types of CRTs
Unitrust (CRUT)
Pays a variable income (typically between 5-9% per year) based on a fixed percentage of the trust assets as revalued once each year. One advantage of a unitrust is that your income can increase as the trust principal grows over time. Also, you may make additional contributions at any time.
Annuity Trusts (CRAT)
Pays a Fixed annual income determined at the outset. The annuity trust is often preferred by those who are interested in the security of a constant return. Additions cannot be made to annuity trusts.
FLIP Unitrust (FLIP)
The FLIP Unitrust allows you to defer or limit income payments until a future time, such as your 65th birthday or the sale of an illiquid asset, when the trust "flips" and begins to pay a percentage of the assets re-valued annually. Meanwhile, the trust assets can accumulate tax-free.
How Do I Create A CRT?
Setting up a CRT is not particularly difficult, but donors should be
advised by an attorney with expertise in the area of charitable trusts
and estates. CRTs require a trust agreement that outlines the terms
and conditions of the trust. Once your trust agreement is signed, you
can "fund" the trust by transferring assets to your appointed
trustee.