Charitable Remainder Trust
Questions for Professional Advisors
Note: If you are not a professional advisor these questions may still be helpeful in determining if a Charitable Remainder Trust is right for you.
- Do your clients need current income to support their lifestyles?
- Do your clients have children or grandchildren that need help paying for college?
- Would they like to also provide immediate support to your favorite charity?
If you answered yes to these questions then you may want to consider a Charitable Remainder Trust (CRT).
A CRT is a trust that provides for a specified distribution, at least annually, to one or more beneficiaries (you, your spouse, children, etc.) at least one of which is not a charity. The distribution must be paid at least annually for life or for a term of years, with an irrevocable remainder interest to be held for the benefit of, or paid over to, one or more qualified charities.
The specified distribution must be either a sum certain, which is not less than five percent and not more than fifty percent of the initial net fair market value of all property placed in trust (a charitable remainder annuity trust), or a fixed percentage, which is not less than five percent and not more than fifty percent, of the net fair market value of the trust assets, valued annually (a charitable remainder unitrust).
After your death, the remainder of the trust transfers to the Community Foundation and is placed in a charitable fund you select. You receive Michigan Community Foundation Tax Credit for the year you establish your trust.