Charitable Transfers

Question 1

If a person wants income in a fixed amount each year from one specific charity, do they need a trust and what type of gift would this be?

Answer 1

No trust needed because of one specific charity

Charitable gift annuity

Question 2

If a person wanted a fixed payment, and the assets would be payable to any charity, what kind of trust would this be?

Answer 2

Charitable Remainder Annuity Trust - CRAT

Question 3

If a person was OK with multiple charities, it may want to add funds later. They also want to receive income. What options would be available?

Answer 3

Charitable remainder unit trust - CRUT

Or

Pooled income funds

Question 4

Could a person add additional funds in a CRAT or CGA?

Answer 4

No

Question 5

If a person wanted variable payments, but wanted their gift to go to one specific charity, what kind of gift would this be to?

Answer 5

Pooled Income Fund

They didn’t care which charity or they wanted multiple charities. It would be a CRUT.

Question 6

Is there a minimum income requirement to the donor in a charitable transfer?

Answer 6

In a CRAT/CRUT, yes, 5%

However, in a charitable gift annuity or pooled income fund - no 5%

Question 7

If a charity is receiving income, is there a minimum that must be paid out?

Answer 7

Only to a private foundation, 5%

Question 8

What is the purpose of a CRAT/CRUT?

Answer 8

Receiving an income stream while alive with remaining interest, passing on qualified charity

Donor would receive an income tax deduction for the present value of the remainder interest

Question 9

Describe a charitable gift annuity?

Answer 9

Donor transferred properties to a charitable organization for exchange of an annuity payment.

Difference between property amount in annuity will be considered a tax deduction

Example: $1 million transferred for a $750,000 annuity. 250,000 equals tax deduction.

Question 10

What is a distinction of a private foundation versus a CLAT/CLUT? What is another name for private foundation?

Answer 10

Grant’s can be made to an individual

Also known as family foundation

Question 11

Describe a donor advised fund

Answer 11

Private third-party fund designed to manage charitable gifts from many different donors.

Question 12

Who chooses the charity in a donor advised fund? Do you have to make this choice right away?

Answer 12

The donor

No, the money is held in escrow until the donor is ready to donate.

However, the donor receives immediate tax deduction

Question 13

What charitable transfers allow for only one specific charity?

Answer 13

CRUT
Charitable Gift Annuity
Private Foundation
Pooled Income Fund