If you have accumulated wealth during the course of your life, and you desire to receive reliable interest payments to live off of, as well as provide for an important cause, then a charitable remainder trust might be worth a look. These legal entities provide you with the income from your investments for the rest of your life, or up to 20 years before the remaining amount is donated to a charity of your choice.
If you have questions about how charitable remainder trusts in Atlanta might work for you, now is the time ask. Our experienced trusts attorney can answer your questions and help you set up this plan for the future.
How These Trusts Work
In Georgia, charitable remainder trusts are one of the best options for providing future support for a cause that is important to you. These are irrevocable, tax-exempt trusts that require the creator—known as the grantor—to permanently transfer assets to the trust. This removes them from their estate but still provides the grantor with the income from any interest the investments generate. These interest payments can last for the rest of that person’s life, offering income to cover their living expenses.
At the end of their life or after a set term, the trust will terminate. Instead of returning the money to the grantee, any funds remaining in the trust are gifted to a charitable institution. This could include any non-profit or university in the State of Georgia.
Types of Charitable Trusts
There are different options available to grantors in Atlanta when it comes to charitable remainder trusts. These include annuity trusts and unitrusts, which operate differently but work towards the same goal.
An annuity trust pays the grantor a fixed dollar amount each year. This number is chosen at the time the trust is created, and it never goes up or down due to inflation or other external factors. The benefit of this approach is knowing the exact amount of income it will generate during the life of the trust, regardless of the fluctuating nature of how the funds are invested.
Unitrusts do not guarantee a set amount annually. Instead, they provide a variable amount each year that is tied to the fair market value of the trust’s assets. Each payment is a percentage of what this trust is worth, which can fluctuate dramatically every year.
Benefits of a Charitable Remainder Trust
There are several reasons why this approach is beneficial for the grantor. First and foremost, the transfer is tax-free, protecting the grantor from a potentially substantial capital gains tax obligation. It is also treated as a gift under tax law, which allows a person to offset some of their income based on the amount transferred to the trust.
Another important benefit is the ability to plan for the future. These trusts provide a fixed cash flow for the rest of an individual’s life, which can remove the uncertainty of planning for retirement in the future.
Talk to a Lawyer in Atlanta About Setting Up a Charitable Remainder Trust
If you are considering a charitable remainder trust in Atlanta, you could benefit from working closely with estate planning attorney Sarah Siedentopf. This option might be ideal for your situation, but it is critical that you comply with state and federal law. Learn more about what is possible when you schedule a strategy session with us.
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