A charitable remainder trust is an efficient estate planning vehicle. It is a special type of trust that provides for and maintains two sets of beneficiaries. The first set are the income beneficiaries (you and, if married, a spouse). Income beneficiaries receive a set percentage of income for your lifetime or for a fixed term not to exceed 20 years from the trust. The second beneficiary would be Crossroads UMC. Crossroads UMC would receive the principal of the trust after the income beneficiaries pass away.
There are two basic types of charitable remainder trusts; one is an annuity, one is a unitrust.
Establishing either trust is simple:
- Cash or property is transferred to the trust.
- The income beneficiaries receive annually an amount equal to a fixed percentage of the trust’s fair market value (unitrust) or a fixed dollar amount (annuity trust).
- Upon termination of the trust, the assets are transferred to Crossroads UMC.
- The eventual distribution to Crossroads UMC will take effect only at the death of the trust’s income beneficiaries (or at the end of the term of the trust if a fixed term is chosen for the trust).
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