Chariatable Remainder Annuity Trusts

This is irrevocable, provides a deductible charitable gift, and pays the donor an income. The income is fixed, not variable. It is a stipulated, unchanging income for life - a fixed percentage of the fair market value of the assets in the trust valued only once - at the time the trust was created. The minimum annual payment is, by law, at least 5% of the initial net fair market value of the trust property. The donor may avoid capital gains tax if he uses appreciated property that he has held twelve months or longer to fund the trust. He is allowed a current income tax deduction and the charitable institution gets whatever remains in trust at his death.