Charitable Remainder Trusts
A charitable remainder trust is an independent trust that holds assets. A donor transfers cash or appreciated property (stock, bonds, land, or other marketable property) into the trust, reserving an income interest for one or more beneficiaries. Depending upon the assets used to fund the trust, a trustee manages the cash or real property (generally selling the property and reinvesting the proceeds) to generate income for the beneficiaries. The trustee can be one or more individuals and/or a trust department, and, in some cases, the donor.

Usually, the trustee makes quarterly payments to the income beneficiaries that may continue either for the lives or the beneficiaries or for a fixed term of up to 20 years. After the income interest ends, either from the beneficiary's death or the conclusion of the term, the trust terminates. The trustee then pays the remaining assets in the trust to the charity or charities named in the trust for whatever use the donor originally stipulated.

The donor benefits from a charitable remainder trust by gaining a charitable income tax deduction in the year the trust acquires the asset. The amount of the deduction depends upon the value of the donated property, the number and ages of the income beneficiaries, and the annual pay-out rate selected. If the donor cannot use the deduction in the year the trust is established, he/she can carry the unused deduction forward for up to five years and apply it against subsequent income. Since a remainder trust is not part of the donor's estate, it also lowers one's estate taxes.

If you are setting up a charitable remainder trust, you may wish to name Wildlife Habitat Canada as a beneficiary at the time the trust is to be distributed.