Charitable Trusts

To establish a Charitable Remainder Trust, assets are transferred to AG Foundation which, in turn, pays you income according to the terms of the trust. You can receive lifetime income payments for yourself and a spouse, and up to 20 years to third parties, such as children. Upon completion of the trust’s term, the remainder of the trust’s principal is transferred to the ministry of your choice.

A Charitable Remainder Trust is an excellent alternative to an outright sale of appreciated securities, real estate or other marketable assets due to its charitable and capital gain tax benefits, but it can also be funded with cash. The funding of the trust creates an immediate charitable tax deduction, and property sold through the trust avoids imposition of upfront capital gains. Minimum required funding is $50,000 for cash or securities, or $100,000 for real estate.

A Charitable Lead Trust functions in somewhat the opposite way of a Charitable Remainder Trust. You make a contribution of cash or property to fund the irrevocable trust. The trust makes income payments to the ministry for a set number of years. You receive a charitable deduction for the gift. Upon completion, the asset then returns back to you or transfers to your family along with any additional growth in value.

These are best funded with cash, income-producing securities, real estate, or other assets. Minimum required funding is $50,000 for cash or securities, or $100,000 for real estate. A Charitable Lead Trust does not have capital gains benefits, and income generated by the trust may be taxable to you. However, this type of trust can also be useful in reducing taxes on large estates and making tax-advantaged transfers to your children.