There are several types of charitable remainder trusts, but all share three features: each trust has its own separately invested portfolio tailored to specific investment and tax planning objectives. The donor specifies the payout rate, which is typically the amount of life income payments, which are currently 5% to 6% annually. The income may be either for the life or lives of one or more income beneficiaries, or for a specified number of years (not to exceed 20) . Beneficiaries may be the donor or a spouse, relative, or friend. Depending upon the type of charitable remainder trust, the payout amount may be set at the onset (a charitable remainder annuity trust) or may vary with the annual payment (charitable remainder unitrust). At the beneficiary’s death or at the end of the trust term, the principal is distributed to Redwood Library. All charitable remainder trusts should always be done in consultation with the donor’s financial and legal advisors.
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