Charitable Remainder Trusts are a tax savvy way to increase personal income while providing a generous gift for AFM’s future.

There are two main types of Charitable Remainder Trusts: a Charitable Remainder Annuity Trust (CRAT) and a Charitable Remainder Unitrust (CRUT).

1. The Charitable Remainder Annuity Trust (CRAT) pays a fixed annual income based on the initial value of the trust.
2. The Charitable Remainder Unitrust (CRUT) pays a variable annual income based on the trust’s value in the year of the payout.

A Charitable Remainder Trust provides many benefits but is generally created to provide additional income for the donor, the donor’s spouse, and/or other beneficiaries while eliminating capital gains tax on the sale of highly appreciated assets held for longer than one year. Upon the death of the last income beneficiary, the balance in the trust is distributed to Adventist Frontier Missions. This deferred gift may also afford you a charitable income tax deduction.

Benefits

Benefits of a Charitable Remainder Trust include:

• Establishes your commitment to a legacy of Great Commission work.
• Annual income to you or whomever you choose and possible additional income to your heirs for a term not to exceed 20 years
• Potentially substantial federal income tax deduction*
• Elimination of capital gains tax on the sale of highly appreciated assets

Simply stated, a Charitable Remainder Trust is created when you transfer assets to a trust you create. The trust then provides you with annual income for life (or a fixed term not to exceed 20 years.) At the end of the trusts term, Adventist Frontier Missions receives the balance of what is left in the trust.

Example

Dan and Joan contacted AFM about how to convert non-income producing assets into additional income for themselves in a way that would also benefit the Lord’s work. If they sold the property on their own they would have to pay significant capital gains tax. Ultimately, they decided to transfer $200,000 in appreciated property and stocks into a trust. The trust terms provide a payment of $10,000 to them annually for the next 20 years. Plus, they will receive a tax deduction for the difference between the $200,000 and the present value of their retained income interest as determined by current IRS regulations.

To explore the benefits of a specific gift, please email our Planned Giving Specialist
or call 269-473-4250, ext. 103.
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*A Charitable Remainder Trust is an irrevocable gift and that is why there is a potential income tax deduction. However, the information provided is not intended to be legal or tax advice. Please consult an attorney and/or Certified Public Accountant for information about your specific situation.