![]() Interested in helping Rescue Ranch continue its mission for years to come? To maximize your charitable giving, as well as fulfill your own financial needs, you can fund the future of the Rescue Ranch through your estate planning. Planned giving makes every dollar go farther. First, you'll have to determine what assets you'd like to put in the trust.Our Legacy Society – The Easiest Way to Make an Impact In setting up a charitable trust, you have key decisions to make. The bottom line: charitable trusts are a smart tax strategy. Charities don't have to pay capital gains tax, so if the charity sells your property, the proceeds stay in the trust and aren't taxed.Ī charitable lead trust is particularly attractive in that it helps you avoid potential gift taxes and estate taxes. Typically, a charity will sell any non-income-producing asset in a charitable trust and use the proceeds to buy property that will generate income for you. If you own property that has appreciated, the charitable trust allows you to convert that growth into cash, yet you will not have to pay capital gains on your good fortune. This gives you more favorable tax treatment. You can also spread the income tax deduction for the value of your gift over a five year period. When the trust expires, there is no federal estate tax on the property donated to the charity. The goods news is the charity also shoulders the responsibility for managing or investing the property while you reap the rewards. Furthermore, you get to choose how you are paid, whether it's annually, for set time periods or as a percentage of the current property value. With a charitable remainder trust, you’re paid an income for a fixed time period or until you die, and ownership goes to the charity you’ve chosen. Unlike a charitable remainder trust, when the lead trust expires, the charity does not gain control of the donation rather, its ownership goes wherever the donor has stipulated, be it heirs or other beneficiaries. When it comes to earned interest or gains, the proceeds either go to the charity or they are split between the charity and the donor’s beneficiaries. Instead of the charity having control of the properties in the trust, the donor maintains control. Lead TrustsĪ lead trust works inversely to a charitable remainder trust. The trust must also pay out at least 5% of the original investment each year as income for a specified time period or until the beneficiary dies. With a CRUT, the donor can transfer more funds into it at any time. The charity has the option to withdraw it or keep it where it is and continue growing.Ī charitable remainder unit trust (CRUT) is much like a CRAT, but they differ in a couple of ways. When the period is up, the designated charity begins receiving the trust’s remaining interest. A charitable remainder annuity trust (CRAT) pays a non-charitable beneficiary an income for a pre-determined time, either for a dedicated number of years or until the donor's death. There are two types of charitable remainder trusts. A charitable remainder trust is a tax-exempt, irrevocable trust, which means it can’t be changed once the ink dries. When that designated time expires, the assets solely belong to the charity, along with any interest or profits that accrued. The time frame is decided by the donor and has some flexibility, so it could be 5, 10 or 20 years-or whatever works best for you. Charitable Remainder Trustsįor a period of time determined by the donor, the charitable organization has ownership of the donor's assets. Based on your specific needs, you'll need to decide between which of the two is a better fit. There are two types of charitable trusts: charitable remainder trusts and lead trusts. Not only does the donor do a good deed, but the IRS also offers attractive tax benefits for creating a trust. When you’re long gone, what trail will you leave behind to showcase your time on earth? If you've been fortunate to accumulate wealth and want to share it beyond your inner circle, a charitable trust is an opportunity to reach that goal.Ī charitable trust is when a donor gives ownership to a charity or creates a charitable foundation to manage and distribute assets such as cash, securities, and valuables, among others. Life is all about the legacy you leave for others. ![]()
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