Charitable Trusts

Charitable Remainder Trusts are a popular way to make a gift and receive income in return. A donation of cash, stock, real estate or other assets is invested, producing income for the donor or other chosen beneficiaries for a fixed period of years or their lifetime. When the donor dies, The Seton Fund keeps all of the remaining assets. The donor is allowed to claim a charitable income tax deduction for the estimated portion of the assets that will ultimately come to The Seton Fund.

There are two types of charitable remainder trusts: unitrusts and annuity trusts. With a basic unitrust, the donor receives one or more yearly payments equaling a fixed percentage of the trusts value as assessed each year. With a net-income unitrust, the donor receives only the income earned by the trust, even if the trust earns less than the payout rate. However, the trust can be set up to include a "make-up provision," which allows the donor to make up the lost income, provided the trust earns more than the payout rate in future years.

With an annuity trust, the donor receives a yearly fixed payment equaling at least 5% of the value of the asset at the time the trust is funded.

Benefits of creating a charitable trust include:

  • Supplement your retirement income
  • Receive a charitable income tax deduction
  • Bypass capital gains taxes that would have been due upon the sale of the property
  • Remove the property from your taxable estate
  • Membership in of The Seton Fund

For more information on Charitable Remainder Trusts, please contact us at (512) 324-1990.

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