A charitable remainder annuity trust is a gift arrangement whereby you transfer cash or other property to a trust, you retain a fixed DOLLAR income from the trust for life or a period of years, and pass the remaining value of the trust to charity at the end of the trust term.
How does it work?
With the assistance of your attorney, you create an irrevocable trust agreement into which you place cash or other assets. You set the terms of the trust - the length of the trust, the percentage payout from the trust, the trustee, the income beneficiary and the charitable remainder beneficiary. These terms become irrevocable upon execution of the trust agreement.
For example, Fred Mills, a retired Millsaps alumnus, decides to transfer $100,000 worth of stock to a charitable remainder annuity trust and chooses to receive $8,000 per year (an 8% payout) from the trust for the rest of his life. After his death, the remaining trust assets are to be used to fund scholarships at Millsaps.
What are the benefits?
Who manages the trust?
A Trustee must be named to manage the trust assets. This might be a trust company, a financial advisor, trusted individual, or in some cases - you can serve as trustee of your charitable trust. The trustee must ensure that annual tax reporting is completed as well as handle the investment of the trust assets. Millsaps College does not serve as trustee of charitable trusts.
For more information contact:
Gift and Estate Planning Services
P.O. Box 151191
Jackson, MS 39210-1191
(voice) 601-974-1035 (fax) 601-974-1088
DISCLAIMER: The information contained on this page is for educational purposes only. The reader understands that Millsaps College is not rendering legal advice and that the reader should seek independent legal counsel when contemplating estate planning decisions.