A charitable remainder trust creates two interests, one for you and one for a charitable organization. Yours is the present interest--the right to future income for life or for a set number of years. The charitable organization's is the remainder interest--or the right to receive the assets in the trust when it terminates.

Many people would like to make a major gift to their parish, the Archdiocese or Catholic Charities during their lifetime, but cannot afford to give up future income. By creating a charitable remainder trust with the Archdiocese or Catholic Charities and placing assets into it, you can often increase your income and receive that income for a life (or lives) or term of years. While the trust exists, the assets in it are invested to provide income to you. Only when the trust terminates are the assets distributed to your parish, the Archdiocese or Catholic Charities to be used for its mission.

Charitable remainder trusts provide flexibility for you to accomplish specific personal objectives while ultimately helping your parish, the Archdiocese or Catholic Charities. Among the personal objectives could be increasing the income you receive from your assets, providing your spouse with an income for life, providing funds for your child's or grandchild's education, or funds for your retirement to supplement your other retirement programs.

Donors who establish charitable remainder trusts are entitled to an income tax charitable deduction for a portion of the value of the assets placed into the trust. The amount of the deduction equals the value of the charity's remainder interest. The specific dollar value of the charitable deduction is calculated using IRS formulas based on the ages of the income beneficiaries, the amount of income to be paid from the trust each year, the value of the assets placed into the trust, and the month the trust is established.

There are two kinds of charitable remainder trusts: one provides variable income (charitable remainder unitrust) and the other provides fixed income (charitable remainder annuity trust).

Charitable remainder trusts are irrevocable; once you establish one, you cannot cancel it and receive your property back.

Some advantages of charitable remainder trusts include:

• Often, higher income from appreciated, long-term assets (owned more than one year) than the income you now receive from those assets.
• Avoiding the reduction of appreciated, long-term assets (owned more than one year) through capital gains tax. The entire value of the assets continues to work for you.
• An income tax charitable deduction for a portion of the value of the assets placed into the trust. This provides real tax savings now.
• The opportunity for tax-free income when the trust is funded with cash or municipal bonds.