Nonprofit Charitable Orgs

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Charitable Remainder Trust

By Joanne Fritz, About.com

Definition: A charitable remainder trust allows a donor to irrevocably transfer assets into a trust. The trust pays income to the donor or other beneficiaries during their lifetimes, and the remainder goes to a qualified nonprofit.

Charitable remainder trusts may be established during a donor's lifetime or at death. The donor usually names a bank or trust company to serve as trustee of the trust.

There are two types of charitable remainder trusts:

  • Annuity Trust - the donor receives a fixed income and he/she cannot make additional contributions to the trust.
  • Unitrust - this type is flexible in that the donor can make additional contributions to the trust and the payments to the donor can vary.
Examples: A charitable remainder trust is attractive to donors with highly appreciated assets.

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Nonprofit Charitable Orgs

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