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A trust is a separate legal
entity set up by the donor. Trusts can be managed by
the donor, a bank trust department or other methods.
While Radio Kansas is able to provide some sample information
about trusts and expected tax implications, the donor
will need to work with an attorney to set up the trust.
The trust offers significant tax relief, on-going income
and a generous gift to Radio Kansas.
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This trust provides a fluctuating
annual payment to the donor based on a set percentage of return
on the value of the trust each year. The percentage must be
at least 5% of the original gift. The percentage is agreed
upon at the beginning of the trust and is based on age, income
and other tax considerations. The payments continue for the
rest of the donor's lifetime. The balance of the trust then
comes to Radio Kansas. The donor may continue to add to this
type of trust as he wishes. The trust can be funded with cash,
or appreciated assets such as stocks, bonds, real estate,
etc. The trust would normally sell those items once received,
but that would be up to the manager of the trust. By donating
appreciated items to the trust, the donor will avoid capital
gains and receive a partial deduction at the time of transfer.
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This trust works very much like the
Charitable Remainder Unitrust above, with two significant
differences. First, instead of a percentage payment each year,
the donor receives a fixed dollar amount that will not change
over the lifetime of the trust. Again, this amount must be
based on at least 5% of the initial gift. Payment is determined
by age and income. Secondly, no further contributions can
be made to this trust by the donor.
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This variation works very much like
the Charitable Remainder Unitrust above but with the donor
and Radio Kansas essentially changing roles. The income stream
created by the trust goes to Radio Kansas for the lifetime
of the donor. Then the remaining value of the trust goes elsewhere,
as designated by the donor when the trust is set up. A common
model would be to give the income stream to Radio Kansas for
the lifetime of the donor, but then have the remainder go
to family or even another charity at the end of the trust.
Each of these trusts has its own complications and ramifications.
It is necessary to work with your tax advisor and attorney
when setting them up. There are many, many other variations
on these trusts. Radio Kansas is very willing to work with
donors to try and accommodate other variants as desired by
the donor.
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For more information, contact Sharon Webb at 1-800-723-4657
or swebb@radiokansas.org. |
