Charitable Remainder Trusts

A Tax Efficient Way for Donors to Give & Receive

charitable trusts

By Lisa R. Schneider AAMS, AIF

A charitable remainder trust (CRT) can be a great way for donors to plan for both charitable giving and tax efficient benefits to themselves, their spouses, or others. Tax savings are generated because donors receive income, gift, and estate tax deductions for the value of their charitable donations and can defer or avoid capital gains tax when appreciated assets are donated.

What is a CRT?

A CRT is an irrevocable trust that enables donors to give money or property to charities while continuing to receive income from the property for life or for a period of time. The donor (called grantor) and/or other beneficiaries receive distributions from the trust annually and the charity receives the remaining assets when the trust ends. The grantor gets an immediate income tax deduction for the remainder interest (subject to some limitations), defers or avoids capital gains tax on the donated assets, and gets gift or estate tax deductions for the remainder interest. CRT transfers are irrevocable, and terms of the trust are unchangeable, though assets and charitable beneficiaries may change.

How does a CRT work?

CRT’s can be created in two ways, either as Inter Vivos, created and funded during the grantor’s life – which provides income to the grantor and/or the grantor’s spouse or other family member – or as a Testamentary CRT, funded at the grantor’s death through a will or living trust and used to provide benefits to heirs and reduce the grantor’s taxable estate.

Generally, there are two forms of CRT’s: Charitable Remainder Annuity Trusts (CRAT) and Charitable Remainder Unitrusts (CRUT).

With a CRAT, the annual distributions to the income beneficiaries are a percentage (not less than 5% or more than 50%) of the initial net fair market of the assets used to fund the trust. The payout is fixed. If trust earnings are insufficient to meet the required amount, principal must be used. Changes in asset value over time accrue to the benefit or detriment of the remainder charitable beneficiary. This annual payout certainty makes the CRAT more attractive for older grantors. Additional contributions to a CRAT are not permitted.

A CRUT has a variable annual payout, a percentage (not less than 5% or more than 50%) of the current fair market of the assets in the trust. Assets are revalued each year. If principal increases, the payout increases. A CRUT is the preferred form for younger grantors who can risk reductions in payouts in return for the potential to hedge against inflation. Contributions to a CRUT can continue.

While there are variations on standard CRUTs and many variations in individual and family estate and tax planning needs, Charitable Remainder Trusts are an exceptional tool for donors who wish to give generously after their lifetimes, receive income during their lifetimes, realize immediate income tax deductions, reduce or eliminate capital gains, gift, and estate taxes, and enjoy freedom from investment management decisions and duties.

Lisa R. Schneider is a Financial Advisor at Raymond James & Associates and can be reached at:

Lisa.schneider@raymondjames.com

https://www.raymondjames.com/financialclarityandconfidence

Raymond James does not provide tax or legal advice. Please discuss these matters with the appropriate professional. Raymond James & Associates, Inc., member New York Stock Exchange/SIPC.

Renovations To Kitty City & Tiny Town

Tiny Town and Kitty City Renovations and plaque for donors

Renovations to Tiny Town and Kitty City were made possible by these Humane Society of Utah supporters; B is for Brooklyn Parks, Cathy Nelson, India Nielsen, Jodie Rust, Randall Emmett, Reija Toscano, and Toshiko Burton.

kitty city

The generous gifts provided for renovations to existing structures. These renovations included dividing up our three large cat rooms into six smaller rooms to better serve the long-term resident cats in our care. Improvements in lighting and the remodeling of interior spaces also helped provide better care for these cats’ unique needs.

kitty city room

Tiny Town improvements included new flooring, kennel walls, and protective glass to help keep the puppies and young dogs in our care safe from cross-contamination. 

A Gotcha Day Celebration!

Ryan and Lauri Vincent have fostered homeless dogs for the Humane Society of Utah for nearly two years, including senior dogs and three-month-old puppies with mange. Fostering is how they met Faith, their friendly and playful, nine-month-old pit bull breed type pup.

“Faith was around three days old when we first met her,” Lauri explains. “She had to be fed Pedialyte through a syringe, or she would die. This experience bonded our family so intensely that it felt like she was our baby in a way. So we decided to make her a member of our family.” 

On August 1st, Ryan, Lauri, their son Daniel and Faith attended our first annual Gotcha Day event, presented by Mountain West Veterinary Specialists (MWVS). This free event celebrated HSU adopters and included food vendors, photo-ops, live music, and an interactive community art piece. Plus, a birthday cake and puppuccinos for all the dogs in attendance!

“Most people who adopt pets don’t know the exact date their pet was born. We wanted to create an opportunity for our adopters to be able to observe their pet’s unofficial birthday. August 1 is “Dogust: The Universal Birthday for Shelter Dogs, so it was the perfect day to celebrate together with our adopters.” explains Kaya Nielsen, our Events & Merchandise Manager. An adoption anniversary is typically called a ‘gotcha day,’ and throwing a party to celebrate the occasion has become common among adoptive pet parents. 

According to the American Pet Products Association, an estimated 1.7 million people throw Gotcha Day parties for their pets every year. Since 46 percent of individuals in America adopt from rescues, humane societies, and animal shelters, many people throwing parties for their pets don’t know their birthdays, which is why these events have become so popular over the years. 

Kirsten Gull, the owner of MVWS and longtime Utah Humane supporter, says, “We were so happy to sponsor this birthday celebration because we are always looking for ways to help our animal friends and make our community a better place.”  

For those interested in throwing an epic gotcha party for their rescued pet, we recommend coming up with a theme, ordering pupcakes from your local pet-friendly bakery, and getting party favors and food for the humans. 

If you’re hosting an outdoor party during the hot summer months, as we did, be sure to put out plenty of cold water and some plastic baby pools in your yard so your party guests and pets can go for a dip.

Humane Society of Utah Celebrate’s Four Years of Fall in Love

For the fourth year, the Humane Society of Utah has partnered with Mountain America Credit Union to help homeless pets find new homes before the holidays. This year’s Fall In Love event will be held Monday through Friday on November 15-19, and all adoption fees will be waived thanks to Mountain America’s partnership!

To learn more about Mountain America and what motivates their team members to support Utah’s homeless pets so passionately, our Corporate Giving and Communications Manager, Shannon Egan, interviewed Brittani Forbush from the AVP Strategic Partnerships Marketing Team for MACU. Here’s what she had to say: 

Shannon Egan (SE): How did Mountain America come up with the idea to do an event like this?

Brittani Forbush (BF): Over the years, we’ve helped save hundreds of pets for the Humane Society of Utah through the Mountain America Pet of the Week program. To help save even more animals and give them a home before the holidays, we created the Fall In Love event in 2018. Through our special adoption events, we’ve helped more than 400 pets find their forever homes.

SE: Why is it important to you to waive adoption fees for individuals and families?

BF: More than covering the adoption fees, this program creates awareness and helps connect pets to their new families.

SE: What is the overall goal of this event?

BF: Our Fall in Love event is all about saving as many pets as possible. Adopting out so many pets right before the holidays provides the pathway for additional pets at overcrowded shelters and owner-surrenders to be welcomed at the Humane Society of Utah and find new homes.

SE: Why does Mountain America have such a soft spot for homeless pets? 

BF: As an organization, Mountain America is committed to giving back and improving the quality of life of our employees and community members. Many of our employees have fur babies of their own and are passionate about supporting the Humane Society’s lifesaving mission. We realized how important pets were to our employees when we did a pet photo contest a few years ago, and over 400 employees participated. Over the past three years, hundreds of Mountain America employees have served at the Humane Society during the annual Month of Caring event.

SE: Can you tell us about your dog, Hank, whom you adopted from the Humane Society of Utah years ago? 

BF: I first met Hank (formerly Flip) and Roger (formerly Milkshake) at the 2018 Humane Society Gala. Immediately, I noticed that the two of them were inseparable. At that point, I knew Hank and Roger needed to stay together. After talking to my sister, we decided that I would adopt Hank and she’d adopt Roger. Fast forward three and a half years, the two of them are still best buddies.

SE: What is your favorite memory of Hank? 

BF: While potty training Hank, he stayed in the laundry room while I was at work. My dad would come to my house to check on him during the day, and for several days in a row, he found that Hank had escaped and was in another room of the house. We couldn’t figure out how he got over the gate until one weekend when we stayed at my parent’s house. My dad walked into the room and saw Hank in his kennel doing pull-ups and using his kennels as a way to get on top of things!

SE: What do you appreciate most about Hank? 

BF: Hank loves everyone and is so happy. He enjoys having human and puppy friends over and greets everyone with kisses. Even when my nephew pulls his hair or accidentally hits him, Hank just kisses him.

On behalf of all our team members at Utah Humane, we want to thank Mountain America Credit Union for all they do for us! It’s because of generous sponsors like Mountain America that we’re able to provide veterinary care, safe shelter, and love to the thousands of animals who come through our doors. 

For those interested in adopting during this event,  you’ll need to make an appointment by day, and you can come anytime on the day you are scheduled between 10 am – 7 pm. To make an appointment, check availability, and view safety precautions, please visit utahhumane.org/fallintolove.