Charitable Remainder Trusts

A charitable remainder trust (CRT) offers a way to arrange a gift to the Epilepsy Foundation, while providing income for yourself, or your loved ones. To create a CRT, the donor would transfer cash or other assets to a trust. The trustee would then manage the assets and each year income from the trust would be paid to the beneficiaries. When establishing the trust, the donor must elect that regular payments be made in either a fixed dollar amount or a fixed percentage of the principal to the beneficiaries. At the end of the trust term, the principal balance of the trust would pass to the Epilepsy Foundation.

Cash or property may be used to fund a Charitable Remainder Trust. Provided the trust meets all the necessary requirements, the donor would be allowed a charitable income tax deduction for a portion of the assets contributed to the trust in the year that the transfer is made. Like the gift annuity, a charitable trust offers the opportunity to avoid or reduce capital gains when you contribute appreciated property. The unique advantage of a trust is that the payments can be either variable or fixed, depending on your personal financial situation. In addition, you would also have the option of continuing the income to provide for additional beneficiaries. The amount of the deduction and the portion of income that is taxable would depend on the specific terms of the trust. Although trusts offer tremendous flexibility, they can be expensive to maintain. Therefore, it is generally not worthwhile to create a trust in amount below $250,000 to $300,000.

Because of the complexity of CRTs and because your personal financial situation is unique, you should be sure to talk to your financial advisor before making this or any planned or deferred gift.