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Charitable Remainder Annuity Trust
With a charitable remainder annuity trust a donor receives a fixed payout rather than a percentage payout. Annual annuity amount must equal at least 5% of the initial value of the trust. No additional contributions can be made to the annuity trust after the initial gift. Normally used by people in their late seventies or eighties since there is no inflation protection in a fixed payout.
Benefits of a charitable remainder annuity trust
- Fixed income for life or a specified number of years.
- Charitable deduction is generally higher than for a CRUT because any growth in the trust is passed on to charity.
- Bypass of capital gains.