Ways To Give

Charitable Remainder Trusts

A Charitable Remainder Trust provides substantial financial and tax benefits for the donor, as well as significant gifts to the IBF.

When you establish a Charitable Remainder Trust, you irrevocably donate cash or property to fund the trust. The trust manages the assets and earnings, and money from the investments is used to provide regular annual income to you or to the beneficiaries you designate.

Payments from the trust are either made for the life of the beneficiary or for a specific period of time not exceeding 20 years. At the end of the term, or upon the beneficiary's death, trust assets pass to the IBF or other charities designated in the trust.

Potential benefits you may receive from a Charitable Remainder Trust include:

  • Increased current income from appreciated assets;

  • A generous income tax charitable deduction for the value of the IBF's remainder interest -the present value of its right to receive the trust assets when the trust ends;

  • No capital gains tax if appreciated property is used to fund the trust;

  • Savings in estate taxes and probate costs, since the value of the Center's remainder interest is removed from your estate;

  • Generous support to the IBF or multiple charities in a single trust.

A Charitable Remainder Trust provides either fixed or variable income.

Fixed Income

A Charitable Remainder Annuity Trust pays a percentage of the trust's initial fair market value providing reliable, unchanging income not subject to market fluctuations.

An annual payout amount (no less than 5%) is agreed upon when the trust is created, and that payment continues for the duration of the trust. No additional contributions can be made to a charitable remainder annuity trust.

Variable Income

A Charitable Remainder Unitrust pays a percentage of the fair market value of the trust assets, valued annually. At the time the trust is created, you decide what percentage (no less than 5%) of the fair market value of the trust's assets you wish to receive as income.

You will need an attorney to draw up your trust. And, you will need to select a trustee to manage the trust – usually a bank, trust company, or other financial institution. Or, you can serve as your own trustee.

Since a Charitable Remainder Trust requires separate management, and often separate investment, it is usually not economical unless the principal initially equals or exceeds $100,000.

If you have any questions or need additional information, please call the Indiana Bar Foundation toll free at 1-800-279-8772 or contact us online.

We recommend that you consult with your attorney or tax advisor for the various tax benefits and restrictions that may apply to your specific situation. We are available to you and your advisors to answer questions or help arrange a planned gift to the IBF. The IBF's future programs depends on the partnerships we form today.

 

 

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