Planned Giving Support
Charitable Remainder Unitrust
What is a Charitable Remainder Unitrust?
A Charitable Remainder Unitrust, or CRUT, is a planned giving tool that allows you to provide income to yourself or other beneficiaries while creating a future gift for charity. The trust pays a percentage of its value each year for life or a set term, then distributes the remaining assets to the charity or charities you choose.
Through Lutheran Legacy Foundation, the remaining gift can also be placed into a designated fund, allowing your support to continue benefiting a Lutheran ministry in perpetuity. LLF may also serve as trustee, helping manage the trust’s administration, investments, and reporting requirements.
When to Consider a CRUT
A Charitable Remainder Unitrust May Be Right for You If…
You Want to Make a Significant Charitable Gift
A CRUT can help you make a meaningful future gift to one or more charities while still providing income to you or other named beneficiaries.
You Want Flexible Planning Options
A CRUT can be tailored around different assets, beneficiaries, payout terms, and charitable goals, giving you more flexibility in how your gift is structured.
You Have Appreciated Assets
A CRUT may be useful if you hold highly appreciated assets, such as stock, real estate, or partnership interests, and want to explore a tax-efficient way to use them for charitable giving.
You Are Planning a Larger Estate Gift
For high-net-worth donors or those with taxable estates, a CRUT may help reduce estate tax exposure while creating long-term support for the charities or ministries they care about.
Carrying Out Your Charitable Wishes
When the trust term ends, the remaining assets are distributed according to the donor’s charitable wishes. Lutheran Legacy Foundation can help transfer those assets directly to the named charities or place them into a designated fund, allowing the gift to continue supporting ministry for years to come.
Tax Considerations
The transfer of assets to charitable organizations at the end of the trust period is generally tax-exempt. The donor receives an immediate charitable income tax deduction when the CRT is initially funded, based on the present value of the remainder interest that will eventually go to charity. Additionally, because the trust itself is tax-exempt, it can sell appreciated assets without incurring capital gains tax, allowing for more efficient growth of the trust assets.
Trustee Responsibilities
As CRT Trustee Lutheran Legacy Foundation has the following end of trust responsibilities.
- Valuing the remaining trust assets
- Ensuring all final income distributions to the beneficiaries are made
- Distributing the remaining assets to the charitable organizations
- Filing any necessary tax returns for the trust
