Giving to Trusts Information
Trusts
| Living Trust |
Living trusts allow you to
provide for yourself and your family before and after your
death. They are fully revocable, so you can change them at
any time. Unlike a will, a living trust lets you determine
in advance of your death how and by whom decisions will be
made for you.
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You, or a beneficiary, receive the income from the trust assets.
You are in charge, but a professional trustee does the detail work
You name who will ultimately receive the trust remainder
The trust assets bypass probate, so the terms are private.
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| Credit Shelter Trust |
A credit shelter trust is created
to receive the $650,000 exemption (1999 level) that is allowed
by law from federal and estate taxation in the estate of the
first spouse to die.
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Allows the assets from the
trust to pass tax free through the estate of the surviving
spouse at the time of his or her death. If these assets had
not been placed in trust, they would have been included in
the surviving spouse's taxable estate.
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| Charitable Remainder Annuity Trust |
The donor transfers assets to a
trust from which he and/or others receive income for his or
her life or for a fixed term of years. When the trust terminates,
its assets are transferred to the charitable organizations of
his or her choice. This option is selected by those persons
who desire a fixed income stream regardless of inflation.
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A fixed and certain dollar income for life.
A way to increase income from a low-yield holding.
Freedom from investment responsibilities.
Avoidance of capital gains tax on appreciated assets used to fund the trust.
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| Charitable Remainder Unitrust |
Similar to the annuity trust,
this allows the donor to transfer assets to a trust from which
he or she (and/or others) receive income for life or a term
of years. The amount of income payments, however, is based
on a fixed percentage of the trust's annual value and will,
therefore, vary each year. Unitrusts are beneficial if the
donor desires to protect the purchasing power of his or her
income. When the trust terminates, its assets are transferred
to the charitable organizations chosen. Unitrusts also offer
greater flexibility with respect to when the donor receives
payments.
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Lifetime income
A sizable income tax charitable deduction.
Avoidance of capital gains tax if appreciated assets are donated.
Allows income deferral for future needs
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