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Charitable Trusts

  1. Charitable Trust
  2. Charitable Lead Trust
  3. Charitable Remainder Trust

Charitable Trust

If you are considering a major donation to a charitable organization, you may be able to achieve tax savings by making your gift through a charitable trust. Donations made through a charitable trust defer capital gains on highly appreciated assets.

Other Trust Benefits:

  • Your charity of choice, on your schedule
  • Secure a current income-tax deduction

If you make your charitable contribution in your will, the amount of your contribution will be deductible for estate-tax purposes. So you pay no estate tax on donated assets. However, a lifetime charitable trust allows you to make the gift, avoid estate taxes on the donated assets, and get a current income-tax deduction at the time you make the gift without having to give up total control of the amount given.

Charitable Lead Trust

With a Charitable Lead Trust, you can name a charity that is important to you as the income beneficiary of your trust. The charity would then receive the annual income payments from the trust, and you, your family, or whoever you designate, will receive the remainder.

Charitable Lead Trust quick view:

  • Charity receives income during your lifetime
  • Trust residuals are passed to designated party

Charitable Lead Trusts have been steadily gaining in popularity. This vehicle allows taxpayers to reduce estate taxes, eliminate capital gains, claim an income tax deduction, and benefit charities.

Charitable Remainder Trust

If your goal is to donate some of your assets to charity, but you'd also like to enjoy the income from those assets, a charitable remainder trust might be a good option for you. A charitable remainder trust has two beneficiaries. In most cases, one of them is you (and possibly your spouse), and the other is the qualified charity or tax-exempt organization you plan on supporting. Once you pass away, the charity then receives whatever is left over.

Benefits of a Charitable Remainder Trust:

  • Receive a set percentage of income from the charitable trust
  • Make decisions about the assets within the trust
  • Ability to change beneficiaries

Charitable trusts are especially helpful when it comes to highly appreciated assets with limited income-producing potential. You get an income tax deduction because your trust supports a charity, further by avoiding the capital gains tax more money goes to your charity.

A Union Trust Advisor will be able to explain all of the available charitable trust options and help you decide which one might be right for your family.

Securities are not insured by FDIC or any other government agency, are not bank guaranteed, are not deposits or a condition to any banking service or activity, are subject to risk and may lose value, including the possible loss of principal.

Union Bank & Trust
Mailing Address:
P.O. Box 940
Ruther Glen, VA 22546