Varieties of Accelerated Charitable Trusts
There are two types of Accelerated Charitable Trusts that provide you with a way of giving to your favorite charity while retaining income for life.
Accelerated Charitable Annuity Trust pays you a fixed dollar amount each year based on the initial fair market value of the Trust. Once an Accelerated Charitable Annuity Trust is created, you cannot make additional contributions to it.
Accelerated Charitable Unitrust pays you a variable dollar amount each year based on an annual valuation of the Trusts assets. Because of this fluid distribution mechanism, an Accelerated Charitable Unitrust permits additional contributions. There is also a type of income-only Unitrust which allows the deferral of income until such time as it is needed or wanted by you.
With either Trust you choose the payout rate, keeping in mind that the IRS requires that the Trust must pay out a minimum of 5% annually (unless you select the income-only Unitrust), or a maximum of 50% annually.
For individuals or married couples seeking to maximize this post tax disposable income, the Accelerated Charitable Unitrust is the favored trust structure due to its characteristic of heightening realized financial benefits.