You can set up a charitable trust to benefit both your family and Mass General. With a charitable trust, you irrevocably transfer cash, stock or real estate to a trustee of your choice. The trustee invests and manages the trust’s assets and follows the terms that you set forth. There are two basic types of charitable trusts.
Charitable Remainder Trust: With a charitable remainder trust, the trustee pays out to you and/or another loved one whom you name, an income for life. You also receive a charitable income tax deduction in the year you establish the trust. Upon the passing of the last named beneficiary, Mass General receives the remainder of the trust to support an area that is important to you.
There are two kinds of charitable remainder trusts. A charitable remainder unitrust provides a variable rate or return. It pays a predetermined percentage of the fair market value of the trust’s assets as re-valued annually. A charitable remainder annuity trust pays a fixed dollar amount every year regardless of market performance.
Charitable Lead Trust: With a charitable lead trust, the trustee provides income to Mass General for a period of years that you choose. Payments can be fixed or variable. When the trust term ends, the remainder of the trust goes back to you or can pass to another person whom you name, such as children or grandchildren. Using a lead trust may reduce the federal gift or estate tax cost of transferring assets to heirs.
You can establish charitable remainder and lead trusts during your lifetime or through your will.