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Charitable Trusts: Gifts That Provide Income

Charitable Trusts: Gifts That Provide IncomeThere are several different instruments which are used to create these income-producing gifts. Each has its appropriate and special applications:

Charitable Remainder Annuity Trust (Fixed Income)
The donor will realize a set percentage of the original gift. The donor may not add to the original gift, but may make subsequent gifts establishing separate Annuity Trusts.

Charitable Remainder Unitrust (Variable Income)
The donor may realize a fixed percentage of the gift valued each year, also payable at least annually. The unitrust may also provide for future additional gifts to increase the size of the trust.

Net Income Unitrust
This trust pays the donor whichever is less: its net income for the year or the specific fixed percentage amount. Another use for this trust is in retirement planning. Trust assets are invested voluntarily by the trustee in low-yield, high-growth assets during working years, then at retirement the gains are taken within the trust and the principal amount is reinvested to high-yield assets to fund retirement needs.

Charitable Lead Trust
The donor transfers assets to a lead trust, which distributes income to Hospice of Marion County for a term of years. At the end of the term, the trust distributes the assets, usually to children or grandchildren. Income received by Hospice of Marion County from the trust is used for purposes you specify. The lead trust is generally a lifetime gift; however, you can establish a testamentary lead trust (at death) that would provide similar benefits to your estate, as you would enjoy during your lifetime

We encourage donors to consult their financial/legal advisor to determine the best choice.

How it helps you:

  • Avoid or defer capital gains taxes on appreciated property of the life-income gift
  • Tax deduction based on age, percentage return and current market value of asset
  • Increase income produced by the asset


Disclaimer registration #: CH1781
A copy of the official registration and financial information may be obtained from the Division of Consumer Services by calling toll-free 1-800-435-7352 within the state or at www.FloridaConsumerHelp.com. Registration does not imply endorsement, approval or recommendation by the State.