A trust is an instrument under which property is transferred with the intention that it be administered by a trustee for another's benefit.
There are various types of trusts, however some of the more commonly used trusts for planned giving purposes follow.
A charitable remainder trust receives cash or property from a donor and pays a specified annual amount to the donor and/or one or more beneficiaries for a fixed period of years (often the life of the donor). At the end of the term of the trust, the remaining trust assets are distributed to Messmer. A charitable remainder annuity trust provides a fixed payment; a charitable remainder unitrust pays out a fixed percentage of the trust value each year. A charitable remainder trust is a tax-exempt trust that may sell appreciated property without paying capital gains tax.
A charitable lead trust receives cash or property from a donor and makes payments to Messmer for a specified period of time. At the end of the term of the trust the remainder of the trust property reverts to the donor or his or her designated heirs. If the principal reverts to the donor, he or she gets a charitable income tax deduction; if an heir, that person gets a charitable gift tax deduction. Similar to a charitable remainder trust, payments to Messmer from a charitable lead trust can be made to Messmer in a fixed annuity amount or a percentage unitrust amount.
Donors should note that that unlike a charitable remainder trust a charitable lead trust is a taxable trust and each year the charitable lead trust will report its income and then take the deduction for the amount that it distributes to the charity. Any excess may be subject to tax.
For more information about trusts, please contact Messmer’s Development Office at 414-264-5440 or email@example.com