Operate the
charitable remainder trust under the rules.
UPON DEATH the property placed in the
charitable remainder trust passes to the designated charity.
The wealth replacement trust is usually implemented first in order to ensure that there is no gap in asset protection between the delivery of the contribution to the
charitable remainder trust and the purchase of the life insurance contract.
A split interest gift may be made in trust or property; however, charitable split interest trusts include many of the more popular methods of charitable giving such as
charitable remainder trusts and charitable lead trusts (both discussed below).
The Ruling holds that a
Charitable Remainder Trust may pay amounts to a Special Needs Trust for the life of an individual if (1) the individual is "financially disabled" (meaning they're unable to manage their financial affairs), and (2) the CRT and SNT combination conforms to one of the following three formats:
9) The IRS has further ruled that such coins can be used to fund a
charitable remainder trust since they are readily convertible to other income producing assets.
While charitable lead trusts (CLTs) first make a stream of payments to one or more charitable beneficiaries, then leave remaining trust assets to non-charitable beneficiaries,
charitable remainder trusts (CRTs) do the opposite.
A charitable lead annuity trust or unitrust, which is essentially the reverse of the
charitable remainder trust, provides that a fixed annual payment, either in the form of an annuity or a unitrust percentage, is made to one or more qualified charities during the term of the trust.
Done right, a
charitable remainder trust can also help preserve the value of your estate for the benefit of your heirs.
Most
charitable remainder trusts have a payout rate of between 5 percent and 8 percent of the trust's net fair market value, depending upon the ages of the income recipients.
Created in 1969 under Section 642(c) of the Internal Revenue Code, pooled income funds are similar to
charitable remainder trusts in that they provide lifetime income for the donor, with the remainder of the fund going to the designated charity when the last beneficiary dies.
2 Question #2: My client wants to donate bonds, real estate in vestment trust (REIT) units, closely held stock, real estate, collectibles, or other assets that are not publicly traded stock to his or her private foundation or to a
charitable remainder trust that will pay into that foundation.
