Donations to PRASAD CDHP

Charitable Remainder Trusts

Consult with your financial planner, accountant and/or attorney to determine which categories best fit your individual and family situation.

For donation assistance please call 845.434.0376 or send an email message to development@prasadcdhp.org.

It is possible for a donor to make a gift in trust for the future use of PRASAD CDHP and still retain an income for life from the donated property. A donor may like to make a contribution, but currently needs to retain some income from the donated assets. A Charitable Remainder Trust can be a cost-efficient and tax-wise way to benefit PRASAD CDHP. This type of trust allows a donor to make an irrevocable gift of assets to a trust, receive an immediate income tax deduction for the present value of the gift, while receiving guaranteed income for a period of time or for the rest of his or her life. If the donors are married, income can be guaranteed for the life of each spouse. Income can continue on to children or other beneficiaries as well. There may be gift or estate taxes to consider when naming a beneficiary other than your spouse.

There are two basic types of Charitable Remainder Trusts:

1. The Charitable Remainder Annuity Trust pays to the donor or another beneficiary an annual income that is a specific dollar amount or a fixed percentage of the original principal of the trust. This type of trust assures the recipient the payment of a fixed annual income. Payments remain constant for the life of the trust, regardless of the actual income of the trust.
2. In a Charitable Remainder Unitrust, the annual income paid to the beneficiary is based on a percentage of the fair market value of the trust assets each year. If the value of the assets increases, then the annual income to the donor increases. Conversely, if the value goes down, then the beneficiary’s annual income goes down. One advantage of this type of Charitable Remainder Trust is that the donor may contribute additional assets in the future to this trust without the necessity of creating a new trust instrument. The trust can also be designed to provide a hedge against inflation.

A Charitable Remainder Trust is a flexible instrument. It can be used to provide a lifetime income for the donor and his or her spouse, family members, or other individuals. The amounts and frequency of these payments can vary within certain guidelines set by the government. A Charitable Remainder Trust can be established during a donor’s lifetime or can be established on a testamentary basis to commence after your death to provide income for a loved one.

In general the tax deduction allowable for establishing a Charitable Remainder Trust is based on several factors: the age of the income beneficiaries, the interest rate to be paid, and the applicable interest rate used by the IRS at the time of the gift to the trust. The older the beneficiary of the trust, the greater the income tax deduction in the year the trust is established. Additionally, the lower the interest rate to be paid on the trust, the larger the income tax deduction will be in the year the trust is established.

A Charitable Remainder Trust can be funded with cash, equities, bonds, real estate, art, business ownership, etc. Funding a trust with appreciated assets can be extremely advantageous because the donor avoids tax imposed on gains from a sale of the assets. This can result in greater income to the beneficiary than if he had sold the assets himself, paid the tax and invested the proceeds. In addition, a large income tax deduction can create tax savings that can in turn be invested or gifted. A Charitable Remainder Trust can also result in a larger gift in the future to PRASAD CDHP, since principle has not been lost to capital gains tax, and assets in the trust are allowed to grow tax-free.

Consult with your financial planner, accountant and/or attorney to determine which categories best fit your individual and family situation.

For donation assistance, please call 845.434.0376 or send an email message to development@prasadcdhp.org.