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Types of Charitable Remainder Trusts
Annuity Trust: The donor, or anyone the donor designates, receives a fixed income stream for as long as
20 years (or lifetime if the beneficiary is a spouse) payable no less than annually. The donor receives
capital gains, income and estate tax breaks.
Unitrust: The donor, or anyone the donor designates, receives a variable income stream for a term of
years (or lifetime if the beneficiary is a spouse) payable no less than annually, based on a fixed percentage
of the trust's annual income. The donor enjoys capital gains, income and estate tax breaks.
Donor Benefits of Annuity Trusts and Unitrusts:
Taxes -Income tax deductions are based upon the present value of the remainder interest. Your heirs
avoid federal estate tax on the total amount placed in trust.
Guarantee -You ensure an endowment and guarantee your philanthropic goal is executed according to your
directives.
Investment Flexibility -As trustee, the charity can sell low yielding stock and reinvest the proceeds
to provide a superior return.
Value -Besides investment flexibility, you leverage your dollars for additional income through
avoidance of capital gains taxes on the sale of the appreciated asset gifted into the tax-exempt trust.
Simplicity -The charity can supply charitable trust documents to your legal advisor for review and
approval.
Lead Trust: Income is paid to OJCF for a specific period of time, after which all the assets of the trust
are returned to the donor or to anyone the donor designates in the trust agreement. The income stream is determined
at the time the trust is created. The donor receives substantial gift and estate tax benefits.
Donor Benefits of Lead Trusts:
Taxes -If the eventual recipient of the trust assets is a family member (but not you or your spouse),
significant gift, capital gains, estate and transfer tax savings are possible. The income that goes to the charity
is not included on your income tax return. In the event that the trust assets revert back to you or your spouse,
you are eligible for a charitable deduction for gift and estate tax considerations.
Guarantee -The current income stream from this trust guarantees an endowment
today and assures that your philanthropic goals are executed to your directives.
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