What types of charitable trusts are there?
There are two types: the charitable remainder trust (CRT) and the charitable lead trust (CLT). The CRT is more familiar, but the CLT offers many attractive benefits worth considering. A CLT lets you donate the income stream from an asset to a charity for a set number of years. You determine who gets what assets when and at what percentage. The remaining appreciation goes to the person who established the CLT or his or her family members. Are there variables of CLTs? Yes. There is a charitable lead unit trust (CLUT) and a charitable lead annuity trust (CLAT). A CLUT gets valued once a year and the proceeds are ‘sprinkled’ at the set percentage. Say you have a property worth $2 million. You sell it for cash. You specify the charity’s payout rate as 5 percent (so the charity gets $100,000). You invest the rest of the money in whatever you choose (securities, bonds, etc.). Every year, the charity gets 5 percent based on the investments’ performance, so the amount will vary every year. With
