If you are interested in supporting one or more charitable organizations, you will learn that there are many ways you can do this. You may opt to volunteer your time through services or consultation, or you may opt to provide financial support. The latter is something you can do now while you are alive, but also something you can do after you die via your estate plan.
If you wish to bequeath a sizeable sum of money or financial asset to a charity, you might also want to ensure that you retain enough of your financial holdings to properly support you for the remainder of your life.
Understanding the functions of charitable remainder trusts
As explained by Smart Asset, there are special forms of trusts exactly for this type of situation. One is a charitable remainder unitrust, or CRUT, into which you place assets and receive a percentage of the asset value in income every year while you are still alive. Upon your death, the remaining assets flow to your designated charities. You may also add assets to this trust during your lifetime.
A charitable remainder annuity trust works in a similar fashion but does not allow you to add assets once you have initially established the trust. In addition, you will receive a set dollar amount in income each year with a CRAT.
Getting started with a charitable remainder trust
If you would like to learn more about the options available to you when you want to balance your philanthropic interests and your need to secure an ongoing income stream for yourself, please feel free to visit the charitable giving through estate planning page of our estate planning website.