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Charitable remainder trusts allow you to combine the immediate benefits of charitable giving with the long-term advantage of a lifetime income. That income may consist either of a fixed amount paid to you each year of the trust term (Charitable Remainder Annuity Trust), or an amount which will vary each year as the value of the trust principal varies (Charitable Remainder Unitrust). Charitable trusts allow you, the donor, to determine the annual rate of return you will receive. (By law that amount must be at least five percent of trust principal.) Charitable remainder trusts are individually invested and managed, and can be tailored to accommodate your current and future investment strategies. The choice of investment manager is yours to make, allowing the charitable trust to complement your lifestyle, as well as your financial situation. Charitable remainder trusts are usually funded with appreciated property, most often securities, transferred directly into the trust. Such transfers are sheltered from capital gains tax at the time of your gift and throughout the life of the trust, providing a definite advantage to you and your income flow over time. A transfer to a charitable remainder trust results in a charitable contribution tax deduction. This deduction varies with the annual income percentage of the trust you select (e.g. a five percent income produces a larger deduction than an eight percent return) and with your age. A trust may also be created under your will (known as a Testamentary Trust) that provides for an annual income to be paid to a loved one during their lifetime, with the Hospital named as the beneficiary of the remainder interest of the principal at the end of the trust term.
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