Preaching the Gospel, Preparing a People

Planned Giving: Trusts

You are here

Planned Giving

Trusts

Login or Create an Account

With a UCG.org account you will be able to save items to read and study later!

Sign In | Sign Up

×

Trusts

A trust is a legal entity that holds property for the benefi­t of another person, group, or organization. Trusts are organized in different ways, depending on their purpose. You can make the United Church of God a benefi­ciary in a new trust, or by amending a current one.

Benefi­ts of trusts

  • Avoiding probate. Unlike a Will, a trust allows you to bypass probate when transferring your assets to your benefi­ciaries upon your death, usually saving time and fees.
  • Providing privacy. A trust dispenses your assets confi­dentially without any public or court records, unlike a Will, which becomes a public document in probate.
  • Contingency planning. You can arrange your trust so that if you become incapacitated, your successor trustee can step in and manage your affairs, avoiding a court-appointed conservatorship to do so.
  • Avoiding compulsory succession. A Will can be challenged and changed in court. A properly drafted trust can keep your wishes secure and avoid a legal battle over your assets.

Two categories of trusts

A revocable trust is one you can dissolve, amend or replace (as the creator of the trust).
These include:

  • Living or Family Trusts (most common; used to avoid probate or court oversight)
  • Special Needs Trusts (designed to help a loved one with a disability without voiding government help)

An irrevocable trust can’t be changed once established. The assets in the trust are no
longer part of your estate or under your control. These include:

  • Charitable Remainder Trusts
  • Charitable Lead Trusts
  • Irrevocable Life Insurance Trusts

A legal, tax, and planning team may best help you determine what type of trust is best for
your situation, how to design it, and how it will work to fulfi­ll your objectives.

To name the Church as a benefi­ciary of your trust, you will need the following information:

United Church of God, an International Association
555 Techne Center Drive, Milford OH 45150
Federal Tax ID #: 95-4529758  

Charitable Remainder Trust

A “charitable remainder trust” is a tax exempt trust that allows you to make a planned charitable gift to the United Church of God or another qualified charity of your choice. This planned future gift will provide the donor income today. After the donor’s death, or a period of years, the gift is final and goes to the charity.

Benefits of using a Charitable Remainder Trust (CRT)

  • You can sell a highly appreciated property and reduce or eliminate capital gains, gift, and estate taxes
  • The money that would have gone to pay capital gain taxes remains to be invested to produce more income for you.
  • Receive an immediate income tax deduction based on how you setup your CRT.
  • Distributions from a CRT are taxable to the recipient under a tiered system for tax savings
  • Give to charity
  • Receive income for life or term of years
  • 100% of the property’s sale’s net proceeds provide an income for you or others.

There are two types of Charitable Remainder Trusts.


Charitable Remainder Annuity Trust (CRAT)
  • The payout is fixed and never changes.
  • No additional contributions to a Charitable Remainder Annuity Trust are allowed.
  • More attractive to older donors because income payment is always the same and is certain.
     
Charitable Remainder Unitrust (CRUT)
 
  • The payout is a variable percentage of the current fair market of the assets in the trust.

  • Additional donations are allowed to be made to Charitable Remainder Unitrusts.

  • Preferred form for younger donors willing to take more risk for a potential larger income payment.
     

Your Lawyer will need the following information:

United Church of God, an International Association
555 Techne Center Drive, Milford OH 45150
Federal Tax ID #: 95-4529758  

Charitable lead Trust

A charitable lead trust allows you to ­financially support one or more charities for a specifi­c time period. Once the trust term expires, any remaining assets are transferred to your benefi­ciaries or return to your estate. You can use this type of trust to provide ongoing support to the United Church of God or another qualified charity.

Consult your legal or tax advisor when considering a charitable lead trust, as they are usually complicated and subject to IRS rules

Bene­fits of using a Charitable Lead Trust

  • Charitable giving. You can experience the impact of your contributions during your lifetime by giving annual gifts to your causes over the term of the trust.
  • Reducing gift & income taxes. Some types of CLTs qualify you for gift tax or income tax charitable deductions (thus balancing a large income tax liability).
  • Lowering estate taxes. A CLT locks in today’s value of the trust property for estate tax purposes. When your heirs inherit the property, the appreciation of your assets will be estate tax free.
  • Transferring family assets. A CLT enables you to give to charity now while providing a potentially tax-efficient pathway to transfer the remaining assets to bene­ficiaries when the trust ends.

Two primary types of Charitable Lead Trusts

In a Grantor Lead Trust, the donor retains ownership of the assets.

  • All trust income and expenses pass through to the donor on the donor's personal income tax return.
  • Current charitable tax deductions can be taken on the future value of gifts that will be paid out to the charity.
     

In a Non-Grantor Lead Trust, the trust owns the assets.

  • The trust deducts the annual payments to the charity.
  • All income and expenses are reported on a separate trust income tax return, and the trust is responsible for paying tax on its undistributed net income.

You will need this information to include the Church in your charitable lead trust:

United Church of God, an International Association
555 Techne Center Drive, Milford OH 45150
Federal Tax ID #: 95-4529758

 

You might also be interested in...