Add a Charitable Remainder Trust to Your Investment Portfolio

Retirement planning often starts with setting goals. You want to increase your investment income; you want to lessen the financial risk created by concentrating your wealth in a single asset; you also want, someday, to make a major gift to one or more favorite charitable organizations, like the Fresno County Library.

This is the perfect time for you to consider adding a charitable remainder unitrust or charitable remainder annuity trust to your investment portfolio.

You won't have to worry about the investment of your trust. It becomes the responsibility of your trustee. The trustee will sell the assets you have donated to the trust and replace them with diversified assets uniquely suited to your goals. He or she will be able to reinvest to increase disposable income with no loss of trust principal because a charitable remainder trust incurs no capital gains tax.

You decide, before you sign and fund the trust, the income you will receive. With a charitable remainder annuity trust, you select a fixed dollar amount. It will never vary. With a charitable remainder unitrust, you select a fixed percentage of the fair market value of the trust's assets revalued annually (thus, your income varies with the growth or decline of trust principal). The annuity trust amount and the standard unitrust percentage must be at least 5 percent of the initial trust principal.
Your income will be taxed on a four-tier system: ordinary income, long-term capital gain, tax-exempt income and return of principal. You will also receive charitable contribution deductions from income, gift and estate taxation.

Then, after your life, or the life of the final income beneficiary of the trust, its assets will be distributed to a charitable organization (the remainderman), like the Fresno County Library.

Calculate how a charitable remainder unitrust can benefit you.

Calculate how a charitable remainder annuity trust can benefit you.

Please call Linda Calandra at (559) 488-3492, or e-mail us at Linda.Calandra**fresnolibrary.org (replace ** with @ to send email), for more information.

The information on this site is not intended as legal, tax or investment advice. For such advice, please consult an attorney, tax professional or investment professional.