Charitable Remainder Trusts

If you have assets that you wish to give to Bideawee, but you would like to keep the income now, you might consider a Charitable Remainder Trust (CRT).

A CRT is used to hold assets that produce an income stream for the donor (or other selected beneficiaries) for the donor's life or for a period of years. At the termination of the trust, the remaining trust assets (the "charitable remainder") are transferred to Bideawee to help animals in need.

When setting up a CRT, please consult an experienced attorney, in consultation with your accounting and financial advisors.

A "flip trust" is a charitable remainder trust set up to pay out a minimal income stream to the income beneficiary for a period of years, while the trust is invested for growth, and then "flipped" at a future "trigger date" to pay the income beneficiary at a higher established rate.

Charitable Remainder Trusts are extremely flexible instruments, offering many options that can be tailored to meet a donor's specific needs. For example, A donor may:

• Set up a charitable remainder annuity trust (CRAT) with a fixed annual payout
• Set up a charitable remainder unitrust (CRUT) with a payout that varies based on the value of the investments
• Within certain prescribed limits, select the payout rate
• Select a lifetime payout or a term of years
• Select the income beneficiaries and the charitable remaindermen
• Opt to name a third-party trustee to administer the CRT or may serve in this capacity himself/herself.

Typically there are three characteristics of a Charitable Remainder Trust donor:

1. Comfortable in making an irrevocable gift of $100,000, the minimum amount recommended for a Charitable Remainder Trust to perform efficiently.
2. Able to handle, or to delegate, annual reporting and other tax issues.
3. Willing to accept annual administration costs.

There are a variety of short and long-term benefits that donors can take advantage of when setting up a Charitable Remainder Trust.

Short-term:

• Converts low-income-producing assets to a steady income stream.
• Minimizes or avoids capital gains taxes on the given assets.
• Generates an income tax deduction in the year of the gift

Long-term:

• Makes the gift to a favored charity now, while the donor is still alive.
• Permits a more diversified portfolio investment strategy.
• Removes assets from the estate now, potentially avoiding estate tax.