Charitable Trusts benefit the donor and their family as well as ministry.  The Mississippi United Methodist Foundation provides information for these split interest gift ideas for discussion with your estate, tax, and financial advisers.

Types of Charitable Trusts:

Charitable Remainder Annuity Trust

A trust that pays a fixed annuity amount, (at least 5% of the initial fair market value of all property placed in the trust), at least annually to one or more non-charitable beneficiaries for the term of the trust. The remainder passes to  a qualified charity.  Once a charitable remainder annuity trust is funded, no additional contributions may be made to the trust.

Charitable Remainder Unitrust

A trust that pays a fixed percentage of at least 5% of the net fair market value of its assets (determined each year) at least annually to one or more non-charitable beneficiaries for the term of the trust. The remainder is to pass to or for the use of a qualified charity. Additional contributions can be made since the trust is revalued annually. The unitrust pays variable income (the percentage is fixed, but the income varies because of the annual re-evaluation).

Charitable Lead Trust

The opposite of a charitable remainder trust.  A trust that pays income to a charitable organization and then the corpus returns to the donor or to the donor’s non-charitable designee at the end of the trust period.

Tax benefits include:

Partial charitable income tax deduction based on the type and term of the trust, projected income, and IRS interest rates.

Elimination of capital gains tax when funding the trust with appreciated assets.

Exclusion of assets used to fund the trust from the estate and possible taxation for very large estates.

The minimum to establish a trust is $50,000.

Please contact the Foundation for more information on these types of gifts, and how you can support and strengthen the ministries of your choice, 601-948-8845, or mike@ms-umf.org.