Charitable Remainder Trusts

If your priorities include flexibility, additional income, and control of managing assets, you should consider establishing a charitable remainder trust (CRT). A CRT requires a minimum gift of $100,000 in cash, publicly traded securities, closely held stock, and/or real estate. A written trust document sets out the specific terms of this gift vehicle and you, another individual, bank, or trust company may act as trustee with the obligation to prudently manage and invest the trust assets. The trust document will specify whether a fixed payment or percentage of the trust asset value is distributed annually (a minimum of five percent applies in both forms.)

The income recipients identified in the trust agreement receive the distribution, which may include the donor and/or beneficiary. The trust may run for the life(s) of the income beneficiaries, or for not more than 20 years. After the trust terminates, the remaining assets become the property of MassArt Foundation. A CRT provides favorable tax benefits. No capital gains tax is owed on the transfer of appreciated property to the trust.

The donor is eligible for a favorable charitable income tax deduction and gift and estate tax deductions may also be available.

If you are interested in receiving a specific fixed annual amount every year for the trust duration, you might consider a Charitable Remainder Annuity Trust.

The dollar payout of a Charitable Remainder Unitrust changes with annual market valuations. If the assets increase in value, the payment will increase, if the assets decrease in value on the valuation date, the dollar value of the payout decreases. Subsequent annual payments will fluctuate from year to year.

If you have the dual goals of supporting the MassArt Foundation and passing significant assets to heirs while minimizing gift or estate tax, you may want to consider a Charitable Lead Trust. Charitable lead trust payments flow to the MassArt Foundation and/or other charitable organizations instead of individuals during the trust term. After the trust terminates, the remaining principal, which in most cases has appreciated in value, becomes the property of your heirs or other specific noncharitable beneficiaries.


Marjorie O'Malley
Vice President of Advancement
617 879 7045