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Charitable Remainder Trusts

With a charitable remainder trust you can make a meaningful contribution to The Leukemia & Lymphoma Society (LLS) while taking advantage of a reliable income stream and generous tax savings.

A smart strategy is to put highly appreciated shares of stock you purchased years ago to work to benefit you, your family and LLS. If you were to sell low-yielding stocks to produce extra income, you'd be subject to a significant capital gains tax. A trust, which you can customize to meet your individual needs, can offer capital gains tax advantages.

Benefits of a Charitable Remainder Trust

By creating a charitable remainder trust with highly appreciated stock, you:

  • can use the full value of your stock
  • avoid tax penalties
  • generate a lifetime income for you and loved ones
  • favorably impact the lives of people with blood cancers

Trusts can be created for the lifetime of named beneficiaries or for a specified term not to exceed 20 years. You can choose from two types of charitable remainder trusts: a charitable remainder unitrust or a charitable remainder annuity trust. The main difference between the two is in how payments are calculated.

Charitable Remainder Unitrust

Here's how a charitable remainder unitrust (CRUT) works:

  • Appreciated assets are transferred to the trust. You select the rate, term and beneficiaries. LLS is named as the remainder beneficiary.
  • You receive an income tax deduction at the time the trust is created.
  • The trust pays a fixed percentage each year to you and/or to other beneficiaries that you designate.
  • Upon the death of the last named beneficiary, the remainder of the trust is transferred to LLS.

With a charitable remainder unitrust, income paid to named beneficiaries fluctuates each year. Although the rate remains fixed throughout the trust's term, the income payment changes based on an annual re-valuation of the trust assets. If the trust investments have performed well, this can be an effective hedge against inflation.

Charitable Remainder Annuity Trust

Here's how a charitable remainder annuity trust (CRAT) works:

  • Appreciated assets are transferred to the trust. The donor selects the rate, term and beneficiaries. LLS is named as the remainder beneficiary.
  • The donor receives an income tax deduction at the time the trust is created.
  • The trust pays a fixed income each year to the donor and/or other beneficiaries that the donor designates.
  • Upon the death of the last named beneficiary, the remainder of the trust is transferred to LLS.

With a charitable remainder trust, named beneficiaries receive a fixed income each year.

Charitable Lead Trust

A charitable lead trust is the mirror image of a charitable remainder trust. During the term of the lead trust, payments are made first to the charitable beneficiary, LLS. At the end of the term, trust assets pass to the beneficiaries you named. If you are seeking to transfer significant or appreciating assets to heirs using today's values, this can be a taxwise method of combining financial and charitable goals.

The Legacy Circle

Become an honored member of The Legacy Circle when you create a trust for LLS.

Get More Information

Our Planned Giving office exists to serve you and your advisors as you consider your support for LLS.  We would be pleased to meet with you, speak by telephone or exchange email messages - it's up to you! Contact our National Director of Planned Giving, at 1-888-773-9958 or legacy@lls.org.

last updated on Monday, July 21, 2014
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