Charitable Remainder Trusts
Charitable Remainder Trusts (CRTs) are irrevocable trusts consisting of two distinct interests: an income interest that provides the donor and/or one or more beneficiaries designated by the donor with fixed or variable payments for life or a specified term; and the remainder interest in the property that the Downeast Lakes Land Trust (DLLT) (and possibly other charities) will receive once the income interest ends.
CRTs are generally funded using cash, publicly traded securities, or real estate, but they can also be funded with other marketable assets. You can also set up what is known as an income exception CRT, commonly referred to as a FLIP CRT, which specifies a trigger event for the trust to begin income payments. Among the seven allowable trigger events are the sale of real estate or reaching a certain age.
How it Works
- Donate by transferring cash, securities, or other assets to a charitable remainder unitrust.
- Obtain a qualifying income tax deduction and steer clear of capital gains tax on transfers to the trust.
- Throughout its term, the trust distributes a percentage of its value to beneficiaries annually.
- At the end, the remainder of the trust passes to DLLT.
Benefits of a Charitable Remainder Trust
- A versatile life income gift that can have either fixed or variable payments.
- Under current law, if you itemize, a portion of the face value of your gift can qualify as a charitable deduction for federal income tax purposes.
- When funded with appreciated assets, there is no capital gains tax either to you or DLLT at the time of transfer. The full value of your gift creates income for you or someone else.
- Within limits, you are able to establish the payment rate.
- When your CRT terminates, the remaining CRT assets will be used by DLLT in accordance with your designated purpose.
Have You Already Made a Provision for DLLT?
If you have made a provision for DLLT in your estate plans, please inform us of your intentions by filling out our secure online form to document your provision. Sharing information about your plans for DLLT ensures that your wishes are understood by the trust.
For more information, please call the Downeast Lakes Land Trust office at 207-796-7100.
Please understand that we cannot offer legal or financial advice, and none of the information provided above should be construed as such. We suggest consulting your own legal counsel or financial advisor before deciding whether to proceed with a gift.
