A charitable remainder annuity trust (CRAT) may appeal to donors who want to make a gift now, but would like to receive fixed payments for life or for a specific number of years. CRATs are typically funded with cash or appreciated assets. The size of the payment is determined at the time the gift is made. Donors seeking a higher payout will receive a lower current tax deduction and vice versa (within certain limits).
Benefits of a charitable remainder annuity trust:
- Receive an immediate income tax deduction for a portion of the gift.
- Receive a fixed income for you and/or your loved ones for life or a number of years.
- Establish a gift with as little as $100,000.
- If your gift is funded with appreciated assets, you can also defer your capital gains liability.
- Support the area of Duke most meaningful to you.
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Charitable remainder annuity trust v. charitable gift annuity
If you are interested in making a gift that yields a fixed income, Duke’s Office of Gift Planning can help you explore how a charitable remainder annuity trust (CRAT) or a charitable gift annuity (CGA) might fit your particular situation.
In general, a charitable remainder annuity trust may provide a more favorable tax treatment than a CGA if you are using highly appreciated assets.
Charitable remainder annuity trusts may be invested with Duke’s endowment assets; however, the payout amount remains fixed. Annuity trust income is backed by all of the trust’s assets.