|
Charitable Split Interest Trusts
|
 |
|
Definition
|
|
Donor gifts right to remainder interest in a trust to charity and either
retains the right to an income, or retains the right to the remainder and gifts
the income interest to the charity.
|
|
|
When Does It Apply?
|
|
Where donor wishes to retain an interest in an asset yet make a present income
tax deductible gift to charity.
|
|
|
How Does It Operate?
|
|
Donor transfers a present or future interest in property to a trust. Amount of
income tax deduction is determined by what is transferred.
|
|
|
Advantages/Disadvantages
|
Advantages - various income, estate and gift tax advantages can be
achieved.
Disadvantages - charitable gift of a trust interest is irrevocable.
|
|
|
Estate/Gift Tax Implications
|
|
Trust property will not be included for death tax computation purposes.
|
|
|
Income Tax Implications
|
|
Donor or other non-charitable beneficiary of the trust can be taxed on the
trust income.
|
|
|
Other Considerations
|
Four types of trusts:
Charitable remainder annuity trust.
Charitable remainder unitrust.
Pooled income fund.
Charitable lead trust.
|
