Charitable Remainder Trust

What is a Charitable Remainder Trust?

A charitable remainder trust is a gift plan defined by federal tax law that allows you to provide income to yourself or others while making a generous gift to Earlham. The income may be a fixed percentage that is based on the amount of the initial gift (Annuity Trust) or a fixed percentage based on the annual value of the trust (Unitrust). The term of the trusts can be for the lifetimes of the beneficiaries you name, or for a fixed term years.

As a charitable remainder trust donor, you irrevocably transfer assets, usually cash, securities, or real estate, to a trustee of your choice (for example, Earlham or a bank trust department).

When the trust's term ends, the principal passes to Earlham, to be used for the purpose you designate.

Payments are usually made annually, semiannually, or quarterly.

Minimum Gift Required:     $100,000

If you are interested in doing your own gift calculation for a Charitable Remainder Trust, please visit GiftCalcs' secure server.

Benefits Include:

1. You will qualify for a federal income tax deduction.
   Note that deductions for gifts of long-term appreciated property will be limited to 30% of your adjusted gross income and gifts of cash and non-appreciated property will be limited to 50% of your adjusted gross income. You may, if necessary, take unused deductions of either kind over the next five years, subject to the same 30% or 50% limitation.

2. The income beneficiaries you name will receive annual income for life, or for the period you designate.

   If you fund the trust with an appreciated asset and the trust sells it, there will be no immediate tax on the capital gain. If you were to sell such an asset yourself, you would owe tax on all the capital gain realized in the sale.

3. Your estate may enjoy reduced probate costs and estate taxes.

4. You will provide generous support of Earlham.