Charitable Remainder Annuity Trust
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What is a Charitable Remainder Annuity Trust?
A Charitable Remainder Annuity Trust is a planned giving arrangement where a donor transfers assets into a trust that pays a fixed income to the donor or other beneficiaries for life or a specified term, after which the remaining assets are distributed to one or more nonprofits.
- A Charitable Remainder Annuity Trust involves the transfer of assets, such as cash, securities, or real estate, into a trust that pays a fixed income to the donor or other designated beneficiaries for life or a specified term.
- The donor receives a charitable income tax deduction for the present value of the remainder interest that will eventually pass to one or more nonprofits.
- At the end of the trust term or upon the death of the income beneficiaries, the remaining assets in the trust are distributed to the designated nonprofits.
- Charitable Remainder Annuity Trusts provide donors with a way to receive income during their lifetime while also making a significant charitable contribution and potentially reducing estate taxes.
Benefits from a Charitable Remainder Annuity Trust:
- Lifetime income: Donors or other beneficiaries receive a fixed income stream for life or a specified term, providing financial security and stability.
- Charitable income tax deduction: Donors may be eligible for a charitable income tax deduction for the present value of the remainder interest passing to Cure SMA, potentially reducing current taxable income.
- Capital gains tax savings: If funded with appreciated assets, donors can potentially avoid capital gains tax on the transfer of assets to the trust, maximizing the impact of their gift.
- Estate tax reduction: The value of the assets passing to Cure SMA upon the termination of the trust is removed from the donor's estate, potentially reducing estate taxes.
How your donation will benefit the SMA community
- Basic research to pave the way for new SMA muscle treatments and a cure
- SMA advocacy initiatives like caregiving access and transportation
- Improving standardized care for every person with SMA
“If it weren't for Cure SMA, we might not have the treatments in place that have helped my daughter to thrive while living with SMA. I'll forever be grateful and do what I can to support Cure SMA."
How a Charitable Remainder Annuity Trust Works
A donor transfers assets into a trust and selects one or more income beneficiaries to receive fixed payments for life or a specified term. The payments are calculated based on a predetermined percentage of the initial value of the trust assets. At the end of the trust term or upon the death of the income beneficiaries, the remaining assets in the trust are distributed to one or more nonprofits as specified in the trust agreement.
Provides a fixed income stream to the donor or other beneficiaries for life or a specified term, with payments made at regular intervals.
In a net income charitable remainder annuity trust, the income beneficiaries receive the lesser (lower of the two) amounts between the fixed annuity payment and the actual income generated by the trust during each payment period. This structure offers flexibility in income distributions.
Contact Us
If you have any questions, would like further information, or want help making your contribution, then please contact us at [email protected] to get started.
Legacy giving typically takes many conversations and is not a fit for everyone. Conversations with Cure SMA about planned giving should be considered general in nature and intended to be used for informational purposes only. It should not be relied upon as legal, tax, accounting, or other professional advice. To determine how a gift or estate planning decision might affect your circumstances, it is expressly recommended that you consult an attorney, financial advisor, or other qualified professional.