Establish a Charitable Trust
We offer donors the opportunity to establish a variety of charitable trusts, which provide many benefits to charity and donors themselves. Charitable trusts may be created using cash or highly appreciated stock, which is then invested for the lifetime of the donor or a period not to exceed twenty years, whichever comes first.
Donors specify which charity the trust will support. In addition to the satisfaction derived from supporting a worthy cause, charitable trusts offer considerable tax benefits – permitting full charitable deduction in accordance with those deductions permitted by law. Each type of trust offers different advantages designed to meet the individual needs of donors.
Charitable Remainder Trusts
A Charitable Remainder Trust (CRT) is an excellent vehicle for donors interested in making a gift to charity as well as creating for themselves a source of income.
There are two types of CRTs that may be established through the Crawford Heritage Foundation – the Charitable Remainder Unitrust (CRUT) and the Charitable Remainder Annuity Trust (CRAT). Both types of trust receive assets from a donor and subsequently pay to the donor an amount each year for the duration of the trust. At the end of the trust period, the remainder is transferred to charity.
A CRUT pays to the beneficiary a variable amount each year, calculated using a predetermined percentage of the market value of the trust. It will typically pay more of its value to the beneficiary throughout the trust period. However, this offers a smaller tax deduction since less of the trust is given to charity.
A CRAT pays 5% of the beginning market value of the trust for a consistent annual payment amount. It provides the donor with a larger tax deduction since it will typically pay more of its value to charity throughout the trust period.
Charitable Lead Trusts
A Charitable Lead Trust (CLT) is the preferred vehicle for donors wishing to provide an annual payment to charity and the trust remainder to themselves or a specified beneficiary (usually a family member).
There are two types of CLTs that may be established through the Crawford Heritage Foundation – the Charitable Lead Unitrust (CLUT) and the Charitable Lead Annuity Trust (CLAT). Both types of trust receive assets from a donor and subsequently pay to charity an amount each year for the duration of the trust. At the end of the trust period, the remainder of the trust is transferred to the donor or a specified beneficiary.
A CLUT pays to charity a variable amount each year, calculated using a predetermined percentage of the market value of the trust. It provides the donor with a larger tax deduction since it will typically pay more of its value to charity throughout the trust period.
A CLAT pays 5% of the beginning market value of the trust for a consistent annual payment amount. It will typically pay more of its value to the beneficiary throughout the trust period. However, this offers a smaller tax deduction since less of the trust is given to charity.
Please contact us for more information on the benefits of establishing a charitable trust. We recommend that you discuss any planned giving vehicle, such as a charitable trust, with a financial and legal advisor to ensure that it meets your needs while it benefits the community.
