A charitable remainder trust is a way of giving assets to a charity through a trust agreement. You can establish a charitable remainder trust through the contribution of bonds, stocks, securities, mutual funds or real estate to a trustee who holds and manages it. You may choose a charitable remainder trust if you have an asset that you would like to eventually donate to charity, but need the income it now provides or do not wish to part with the asset right now.
There are a few benefits to a Charitable Remainder Trust, including:
- Tax savings - a charitable tax receipt is issued upon the transfer of assets to a trust that names a charity as the capital beneficiary
- Income - the trust can provide you a lifetime income
- Worry-free management - The trust can be managed professionally, freeing you from daily investment decisions or market concerns
- Eliminate probates and estate fees - The gift is not subject to probate fees and other estate costs
- You remain in control - The trust retains the asset until death, at which point the charity receives the "remainder" of the property held in trust
- Recognition - Your gift can be honoured during your lifetime.
How do Charitable Remainder Trusts work?
You transfer the assets to the trust, which is a legal document that is set up as a separate entity which holds the assets. Both you and Chalice sign the trust agreement and once transferred, you will receive a charitable tax receipt for the fair market value of the remainder trust, which is calculated by a Canada Revenue Agency Formula that takes into account life expectancy and the present value of the property being transferred into the trust.
Talk to your financial advisor to determine the charitable gift that is best for you. For more information on creating a charitable remainder trust or another legacy gift please contact Marilyn Hall at 1-800-776-6855, ext. 202 or email her at firstname.lastname@example.org .
Charitable Remainder Trust
- Category: Plan A Gift