Charitable Remainder Trusts
Charitable Remainder Trusts give you the option to choose who will receive annual payments for life or a specified term of years. You can name yourself and/or spouse as beneficiaries, children or other loved ones as payment recipients. When the specified annual payment period ends, the trust assets are distributed to the designated ministries of the Evangelical Lutheran Church in America.
WITH A CHARITABLE REMAINDER TRUST YOU CAN:
- Give to ministries of the Evangelical Lutheran Church in America
- Receive income for life or a term of years
- Receive an immediate charitable tax deduction
- By pass capital gain
- Reduce or eliminate estate taxes and probate costs
There are several types of charitable remainder trusts you can establish based on your goals and financial needs. Types of trusts include:
Charitable Remainder Unitrusts make fixed payments of the trust’s annual net fair market value. These payments will fluctuate with the annual net fair market value of the trust.
Charitable Remainder Annuity Trusts make fixed payments of a specified percent of the trust’s fair market value. Any change in the trust’s annual market value will not impact the annual fixed payment to the trust’s income beneficiary.
Unitrusts are created during life but funded through your estate or beneficiary designation on your qualified retirement plan. Such a trust can provide lifetime income for one or more of your survivors, plus leave sizeable gift to your favorite Evangelical Lutheran Church in America ministry. The tax savings generated by the charitable estate deduction can be significant. The trust can be funded with any assets, including qualified retirement estate assets.
Tax benefits
You receive an immediate charitable deduction of the present value of the calculated remainder of the assets initially gifted. If your deduction exceeds what you may deduct in the year of your gift, the remaining portion can be carried forward for up to five years.
Bypass capital gain taxes if you make a gift of appreciated assets. Your appreciated assets are place in your charitable remainder trust. The Evangelical Lutheran Church in America, as trustee, sells the assets and invests the proceeds to meet the requirements of the trust. Because the trust is considered a tax exempt entity, no capital gain tax is paid on the sale of its assets. In order to take advantage of this bypass, you must place the assets in the trust before they are sold.
Reduce or eliminate estate taxes and probate costs. Your gift to a charitable remainder trust is irrevocable. When you, as a donor, or your spouse are the only income beneficiaries, the trust is not taxed to your estate. If there are other income beneficiaries, there may be estate consequences that will be partially offset by an estate tax charitable deduction.
Please speak with an Evangelical Lutheran Church in America Planned Gift Counselor and your financial and legal advisors.
