Gifts that Return Income During Your Lifetime

Charitable Trusts

Charitable Remainder Trusts are a personal management plan that provides both a lifetime income and a charitable income tax deduction to the donor. The donor selects the payout rate, usually between 5% and 7%, which gives the donor, and perhaps the donor’s spouse or other beneficiary, an income every year for life. The higher the payout rate, the lower the charitable income tax deduction. If the trust is funded with appreciated securities, capital gains taxes are avoided. The trust may be designated to benefit a particular program at the Arizona Elk Society or it may be unrestricted. 

There are two types of charitable remainder trusts: the annuity trust and the unitrust. The charitable remainder annuity trust pays a fixed, guaranteed dollar amount, regardless of the trust’s investment performance. The income rate is determined at the time the trust is funded. The annuity trust is best for donors who seek a regular, fixed income and prefer to have the satisfaction of knowing the exact amount of the payment in advance. No additional gifts may be added to an annuity trust.

The charitable remainder unitrust pays the donor a predetermined percentage of the fair market value of the trust’s assets as re-valued annually. If the trust’s assets increase the donor receives a larger payment, providing a hedge against inflation. Additional contributions may be made to a unitrust.

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Summary of Financial Benefits:
  • Guaranteed fixed payments for life, a portion of which is nontaxable
  • Charitable income tax deduction for a portion of the gift
  • Reduced capital gains taxes
  • Full campaign credit
  • Membership in the Legacy Society

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Learn More About the Other Ways You Can Give

Gifts after Lifetime Gifts in Partnership