Two win-win ways to donate

09/05/2019

Uncover the option that matches your goal

Which of the following would you like to accomplish?

• Boost your retirement income
• Provide for your heirs
• Reduce your taxes
• Support a Banner Health hospital or program with an enduring gift

With charitable trusts, you can do all of the above and there are two types of trusts that offer unique benefits.

Charitable Remainder Trust vs. Lead Trust

The main difference between a charitable remainder trust and a charitable lead trust is when we receive your gift. With a remainder trust, we receive the remainder after your lifetime or a term of years. With a lead trust, we receive our gift first, with the remainder going to your chosen heirs upon your passing.

With a charitable remainder
trust, you can receive income
for life or a term of years.

Charitable Remainder Trust: Receive income for life or a term of years

When you donate assets to a charitable remainder trust you create, you receive a stream of income from the trust, which can last for your lifetime or a set term of up to 20 years. The income amount may be greater than what the assets currently yield.

If you wish, your spouse or another individual can receive an income from the trust after your lifetime. At the end of the trust term, the remaining balance goes to us. Choose from two basic types of charitable remainder trusts: a unitrust and an annuity trust.

Charitable Lead Trust: Reduce Taxes and Leave an Inheritance for Your Heirs

With a charitable lead trust you transfer cash or assets, which are appreciating in value, into a trust you create with the intention of supporting a charitable organization first, and then returning the remaining assets to your family. It's a tool that helps preserve family wealth.

A charitable lead trust allows
you to reduce taxes and leave
an inheritance for your heirs.

The major benefit of creating a charitable lead trust is in transferring assets to family members at very little gift or estate tax costs. Using a lead trust, you could potentially pay a relatively small gift tax for eventually transferring a large amount of assets to your children. This type of gift provides you with a gift tax deduction, not an income tax deduction.

Types of Charitable Payments for Charitable Lead Trusts

Your transfer to the trust is treated as two separate gifts. The first gift is to us in the form of an annual payment. The second gift is the remainder interest that your family will ultimately receive. To receive a transfer tax deduction for the charitable payment, it must be either:

An annuity payment: With this type of payment, we receive the same amount annually whether the trust assets appreciate or depreciate. If the trust income is insufficient, the trustee uses principal to make up the difference.

A unitrust payment: With this option, we receive a variable amount based on a specified percentage of the fair market value of the trust assets, valued annually. You set the percentage upon creating the trust. The payments fluctuate with trust appreciation or depreciation. If the trust income is insufficient, the trustee uses principal to make up the difference.

Learn more about Charitable Remainder Trusts

Learn more about Charitable Lead Trusts

Contact Pat Elder, Chief Development Officer for Planned Giving, at 602.747.4485 or patricia.elder@bannerhealth.com to discuss a charitable trust option that's right for you.