A Flexible Way to Give
And Receive Income
To create a charitable remainder trust, you place assets into an irrevocable trust and name a trustee (often a bank trust department). The trustee invests the assets (which can grow tax-free) and pays an income for life, or for a set term of years, to the beneficiaries you select. When the last income beneficiary dies, or the trust's term ends, the trust is dissolved and the remaining assets (the charitable remainder) are given to the Michigan Tech Fund to be used for the purpose designated by you.
Charitable Remainder Unitrust—Receive a variable income
The main feature of the charitable remainder unitrust is a variable income. With this type of trust, you receive an income for life, or a specified term, that is a percentage of your unitrust's assets as revalued annually (by law, a minimum of 5 percent). Income payments increase or decrease with the changing value of the unitrust.
The unitrust provides a potential hedge against inflation as income payments may rise over time. In addition, the unitrust can be structured to defer income and maximize growth or to handle specific types of assets.
Charitable Remainder Annuity Trust—Receive a fixed income
A charitable remainder annuity trust provides a fixed income. With this type of trust, you receive an income for life, or a specified term, that is a fixed annuity based on a percentage of the initial value of your trust assets (by law, a minimum of 5 percent).
The annuity trust is most often used when your primary goal is a fixed income and long-term inflation is not a concern.
Establishing a Charitable Remainder Trust
You will need to establish a charitable remainder trust with an outside party, such as a bank trust department. Depending on the type of trust you choose, you may use a variety of assets, including cash, publicly-traded stocks, mutual funds or bonds, closely-held stock, or real estate.
Charitable remainder trusts can be structured in different ways to meet your financial and charitable goals. Selecting the form that is best for you requires careful consideration and consultation with your professional advisors.
Our Office of Gift Planning staff can provide you and your professional advisors with additional information and specific illustrations of how a charitable remainder trust or other life income gift can work for you.