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Charitable Remainder Trusts
A charitable remainder trust is designed to pay annual income to the donor. In this case, the trust document provides that income earned by the trust goes to the donor and/or beneficiaries while the donor is alive, with the remainder going to charity upon the donor's death. Though cash or other property can be used to set up the arrangement, securities generally are the most common means of funding a charitable remainder trust. Once established, the trust cannot be amended or revoked.
Ultimately, at the time of the donor's death, the charity named receives full ownership of the trust assets. In effect, you make a gift of these assets to the institution you choose, but retain the benefit of the income they earn during your lifetime. (It is possible, however, to continue payments after your death to another beneficiary you specify.)
There are two types of charitable remainder trusts: the annuity trust and the unitrust.
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