Charitable Remainder Trust

A charitable remainder trust may be established during a donor's lifetime or through his or her will. The donor irrevocably transfers assets such as cash, marketable securities, or real estate to the trust. The trust then makes payments that are fixed (charitable remainder annuity trust) or payments that fluctuate annually based on a set percentage of the annual value of the assets of the trust (charitable remainder unitrust). The trust can be created to pay income to the donor, or to the donor and spouse, or to any other named beneficiary; it must extend for the lifetime of the recipients or for a term not to exceed 20 years. When the trust terminates, the assets become the property of the College.

The minimum gift to fund a charitable remainder trust at Warren Wilson College is $100,000.

Benefits of a Charitable Remainder Trust:

• You receive a sizable income tax deduction in the year the trust is created (which may be carried over for up to five additional years). The deduction is based on the full fair market value of the gift, the payout rate selected, and IRS actuarial tables.
• You owe no capital gains tax if you contribute appreciated assets to fund your trust.
• The trust is not taxed on gain from its sale of appreciated assets for reinvestment (unless reinvested in tax-exempts).
• You may be entitled to estate tax benefits
• Additional gifts can be added to a unitrust (but not to an annuity trust).