Charitable Remainder Trust
A Charitable Remainder Trust is a type of trust which will provide income to you or other individuals for a period of time, after which the Food Bank will benefit from the remaining assets in the trust. To establish a charitable remainder trust you transfer property to a trustee (usually a family member, friend, legal or financial advisor, or a bank or trust company). The trust is usually funded with cash, appreciated stock or real estate.
You can design your trust to fit your own special needs. You decide how much you’d like to put into the trust, and then you determine the income you’d like to receive from the donated assets. You may choose to receive either a fixed dollar amount from the trust each year or a stated percentage of the fair market value of the trust assets as revalued each year. The latter option provides an opportunity for income to grow along with the value of the trust, although this cannot be guaranteed. Upon the death of the last beneficiary, the remaining assets are distributed to Central Virginia Food Bank to be used as you designate.
| Your Retirement and the Central Virginia Food Bank
by Steve Bayard
 Are retirement and the Food Bank connected? They could be, to the benefit of you and this very worthy charity. How? Why?
About two years ago, my wife Sara and I decided we had reached that point in life where we should slow down and go into what my office manager calls "Occasional Retirement."
After a thorough review of our situation and potential financial needs for our hopefully many remaining years, we found more than abundant assets to provide an adequate inheritance to our children, as well as providing a capital reserve for emergencies. Both Sara and I wanted our estate beyond those needs to go to vital charities like the Central Virginia Food Bank. This is our way of giving back to the community that has provided abundance to us during our life here in Richmond.
Sara and I, however, did not want to give away the funds immediately, as we wanted and needed to maintain an income to sustain us for the years that we hope we will continue to enjoy the Lord's Bounty. We found an excellent vehicle to do this called a Charitable Remainder Unitrust, or CRUT for short.
The CRUT allows us to get an immediate and substantial tax deduction for the funds donated to it. The CRUT will pay us 5% of the principal in this irrevocable trust in each of our remaining years. After the passing of the last one of us, the principal remaining in the trust will be delivered, outside of our estate, to the charities we have designated. An added benefit is that we can change the charities listed initially, right up to our last breath.
Of course, Sara and I have no intention of changing the CRT designation we have in place for CVFB. Having seen face to face some of the needy children they serve each day, in addition to many others, we strongly believe the Food Bank is a charity very worthy of our giving. We take great pleasure in knowing our gift may one day enable them to expand their Kids Cafes, for example, which provide thousands of nourishing meals to children who are less fortunate than our own.
I hope you will consider this opportunity when making your estate plans. Like Sara and I, when you review the CRUT concept with your tax advisor and lawyer, you will likely find many additional legal and tax benefits. Those will of course be in addition to the tremendous satisfaction you'll experience in sharing your good fortune in this life with those you leave behind.
Note: Mr. Bayard is a member of the CVFB Board of Directors; he is not a tax advisor or lawyer.
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For additional information about planned gifts, please contact Tami Messenger at the Central Virginia Food Bank office. All conversations will, of course, be confidential.
Telephone 804-521-3275 • Email: tmessenger@cvfb.org
| The Planned Giving discussion on this website is not intended to be legal or financial advice. Please consult your attorney or financial advisor to determine whether any of these planning ideas are applicable to your own situation. |