An Accelerated Charitable Trust rewards many individuals and married couples who own appreciated assets (including stock and real estate) with an investment vehicle providing a heightened rate of return and significant tax avoidance and deferral capabilities, as well as the ability to make a significant contribution to their favorite charity at no or little real cost to them. The following are several of the Accelerated Charitable Trust’s benefits:

  • Accelerated Income Stream is provided customarily to individuals or married couples. On a post tax basis during the Trust’s typical 4 year life, the vehicle allows them to accumulate a sum equal to post tax value of the asset contributed during the second year of the Trust’s life, and during the third year of the Trust’s life the accumulated post tax sum exceeds that which they would possess by incurring their tax contribution on a conventional fashion.
  • Income Tax Deduction for a Charitable Contribution immediately available to lower your current tax liability.
  • Benefit Your Favorite Charity with the remainder interest, required by the tax avoidance vehicle, while enjoying the exponential increase in your after tax disposable income.

The Accelerated Charitable Trust is a tax-free entity, conceptually similar to other tax-free entities such as an IRA, Keogh or 401K plans. Though a future contribution to a charity is required to bestow these substantial advantages, the motivation of people who create Accelerated Charitable Trusts often has little to do with their charitable inclination, but rather is focused on maximizing their post-tax disposable income for themselves and their families.

What follows is a more in depth presentation of the benefits and variations of this valuable financial and estate planning tool.