Charitable Trusts

Charitable Remainder Trust

A Charitable Remainder Trust is formed by transferring assets to a trust. In most cases those assets are cash, stocks, bonds or real estate. The proceeds are reinvested, and you and/or another designated beneficiary(ies) receive income for life or a specified term of years. When the trust terminates, your trustee distributes the remaining assets to the MMCF and any other charities you have designated.

There are two types of charitable remainder trusts:

Unitrust – The income you receive is a set percentage of the value of the trust’s assets, which is revalued each year.

Annuity Trust – Income payments are fixed and determined when the trust is set up. The annuity trust is most attractive to individuals who wish to avoid market risk.

Your benefits include income for life or a term of years, potential for low-yielding assets to turn into more income, a significant income tax deduction, no capital gain tax at the time of the gift if appreciated assets are used to fund the trust, potentially reduced estate taxes and probate costs.

 

Charitable Lead Trust

A Charitable Lead Trust can work well for individuals who face substantial estate and gift tax liability. Income-producing assets, such as stock or real estate, are irrevocably transferred to a lead trust, which pays income to a 501(c) 3 for a number of years. Following the term of the trust, the property then transfers back to other individuals – typically the donor’s children or grandchildren.

Trusts are complex financial instruments, and require the services of a professional tax advisor and/or your attorney.  Please contact Amanda Larson at for additional information.

 

The Maine Masonic Charitable Foundation is a nonprofit public charity designated as tax-exempt under Section 501(c)3 by the Internal Revenue Service. Donations are tax-deductible to the fullest extent permitted by law. Our tax ID is 22-3211042.