How they work
A charitable remainder trust lets you convert assets that have highly appreciated, such as a business, securities or real estate into income for life, or a term of years, without incurring capital gains tax when the asset is sold. The appreciated asset is transferred into an irrevocable charitable remainder trust and is then sold by the trustee. The proceeds are reinvested, and you and/or another designated beneficiary(ies) receive income for life or a specified term of years. When the trust terminates, the remainder will be used by WMHT for future public broadcasting services to our region.

There are two types of charitable remainder trusts:

• Unitrust -- the income you receive is a set percentage of the value of the trust's assets, which is revalued each year. The unitrust provides a flexible rate of return and can have additional gifts added to it from time to time.
  
  
• Annuity trust -- Income payments are fixed and determined when the trust is set up. The annuity trust is most attractive to individuals who wish to avoid market risk. No additional gifts can be made to the annuity trust after the initial gift.

Because property transferred to the trust will be used for charitable purposes in the future, gift, estate and income tax deductions are allowed in the year the trust is established, for the value of the gift portion of the trust.

Benefits of charitable remainder trusts:

• Income for life or a term of years
• Potential for low-yielding assets to turn into more income
• A significant income tax deduction
• No capital gains tax at the time of the gift if appreciated assets are used to fund the trust
• Potentially reduced estate taxes and probate costs