With a charitable remainder annuity trust, you make a large donation and then certain “income beneficiaries” (often, you and your spouse) receive fixed income payments for life. After the income beneficiaries have been paid, the remainder (what’s left in the trust) goes to charity. How does a charitable remainder annuity trust differ from a charitable gift annuity?
Expenses. If a trust must be created, some legal expenses will be involved. Gift annuities tend to be simpler and cheaper.
Control. You have more control with an annuity trust. You set the income you wish to receive, as long as it’s at least 5 percent of the trust principal. The more income you decide to receive, the less will be left to charity and the smaller your up-front charitable deduction.
When you set up a charitable remainder trust, you can serve as trustee. That gives you some ongoing control over the trust funds–if you wish, you can change the charitable beneficiaries.
