Gift planning is a way of thoughtfully structuring gifts so you can do more to spread the Gospel than you might think possible. One tool that can help you reach your charitable goals is a Charitable Remainder Unitrust—or CRUT. To understand what a CRUT is, let’s unpack each piece of the name starting from the end:

• Trust – something valuable that is managed by a person or organization for the benefit of another.
• Uni – there is only one (or uni-) rate of payment; the percentage is fixed rather than the payment size being fixed.
• Remainder – the payments are designed so that some portion of the value remains after all payments have been made.
• Charitable – the most important part of this type of trust is the intent to make a gift to a Charitable Organization. In the case of the CRUT, the Remainder is the portion that is received by the charity.

In other words, a CRUT allows assets to be transferred into a trust where they provide an income stream for some period of time, then are transferred to a charity like American Bible Society.

Why might I consider a CRUT?

A CRUT might be a good gift plan for you if you want to:

• Bypass capital gains tax
• Increase income from an appreciated asset
• Claim a charitable deduction
• Reduce estate tax

Selling a highly appreciated asset may introduce a capital gains liability. Since the CRUT is permitted to sell the assets tax free, you may be able to avoid the capital gains on the sale. Because a CRUT must pay out at a rate of five percent or more (up to 50 percent), you might be able to convert appreciated stock that is not paying a dividend into an income stream.

Other assets may also generate more income in a CRUT than they are currently. Because when an asset is given to a charitable trust, which is tax exempt, you may be able to take an immediate deduction according to the portion that is expected to transfer to the charity. Finally, when you give away an asset to create a CRUT, you might be able to reduce the size of your taxable estate while still providing a benefit to your heirs.

Is a CRUT right for me?

Each person’s financial goals and charitable goals are unique. The CRUT is a versatile instrument that can aid you in realizing your financial and charitable plans, but you will need to have carefully considered the best approach to reach those goals.

American Bible Society’s staff can meet with you and your professional advisors to help determine how you can have the greatest impact God’s Kingdom while providing for your family and meeting your other financial goals. Call our team at 800-820-6227 or visit our “Contact Us” page to learn how to maximize your giving today!