Christian Heritage School

A Charitable Trust is a trust set up for the benefit of a charity that complies with the regulations of the Charity Commissioners to enable it to be exempt from paying income tax. Gifts made to charitable trusts may provide you or your family with multiple advantages and at the same time give Servite a meaningful legacy. Whether the trust is a Charitable Lead Trust or a Charitable Remainder Trust, you may receive income tax benefits, estate tax advantages, capital gains relief, and income streams to suit your planning goals.

A Charitable Lead Trust is an arrangement in which property income or investment income is given to a charity while the grantor is living, but the principal passes to other designated parties upon the grantor's death.

A Charitable Remainder Trust is an arrangement in which property or money is donated to a charity, but the donor (called the grantor) continues to use the property and/or receive income from it while living. The beneficiaries receive the income and the charity receives the principal after a specified period of time. The grantor avoids any capital gains tax on the donated assets, and also gets an income tax deduction for the fair market value of the remainder interest that the trust earned. In addition, the asset is removed from the estate, reducing subsequent estate taxes. While the contribution is irrevocable, the grantor may have some control over the way the assets are invested, and may even switch from one charity to another (as long as it's still a qualified charitable organization). Charitable Remainder Trusts come in three types: Charitable Remainder Annuity Trust (which pays a fixed dollar amount annually), a Charitable Remainder Unitrust (which pays a fixed percentage of the trust's value annually), and a Charitable Pooled Income Fund (which is set up by the charity, enabling many donors to contribute).