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Frequently Asked Questions If a trust agreement is established as irrevocable, it means that it can't be revoked (broken) except under unusual circumstances. Why would anyone want an irrevocable trust? Many times the reasons for an irrevocable trust involve estate and/or income tax avoidance. In order to be successful in such avoidance, the trustor must not have any direct or indirect power or control over the trust property or income. The regulations on this subject, set out in the Internal Revenue Code, must be carefully followed. What is the difference between a charitable remainder unitrust and a charitable remainder annuity trust? The major difference is in the valuation of the assets of the trust, which establishes part of the calculation for the determination of the amount of income received by the income beneficiary(-ies). The annuity assets are valued at the time the assets are placed in the trust and are never revalued. Annual payments remain the same, whether the assets appreciate (increase in value) or decline (lose value). The assets in the unitrust are revalued annually. If the trust assets appreciate, the payment to the income beneficiary(-ies) will increase. If the trust assets depreciate, the payment will decrease. What happens to my assets in a trust for a charity if the charity goes out of business before the expiration of the trust? Your trustee is authorized to name a substitute, if that is the sole charity.
This is often done if the organization is qualified to so act under local law. The organization's representatives can satisfy you in that regard. Often they will serve without fee, which is an additional incentive.
How often should I update my will or trust? These documents should be updated any time your financial or your family circumstances change. As laws vary from state to state, if you move you should have an attorney licensed in and familiar with the new state's laws review your will or trust agreement. Can I use my insurance to benefit charitable organizations? Yes. This is an area overlooked by many. You can name one or more charities as alternate or as primary beneficiary. Furthermore, if you no longer need the policy proceeds in your estate for use now, you can transfer ownership of the policy to the charity or charities. If the policy has cash loan value, the charity can draw this out and use it. In this case, you not only receive a charitable gift deduction, but any additional premiums you pay are tax deductible for you now. And, on your death, the charity receives the balance of the policy proceeds and none of it is included in your estate for tax purposes. Please note, individual financial circumstances will vary. The information on this site does not constitute legal or tax advice. As with all tax and estate planning, please consult your attorney or estate specialist. All material is copyrighted and is for viewing purposes only. Use of this site signifies your agreement with the terms of use.The content in this Planned Giving section has been developed for Gospel Rescue Mission by Future Focus. Please report any problems to section webmaster. Revised: September 16, 2005 10:22 . |
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Men's Center | Women's and Children's Center | Longterm Recovery | Community Ministries All Contents Copyright 2005 Gospel Rescue Mission |
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There are always specific reasons for making an irrevocable trust agreement. Perhaps it involves a family business where some of the family members are getting on in years and the family wants to make certain that management continues to run smoothly even if hindrances, such as senility, enter the picture. 
Should I name a charity as trustee of my charitable remainder trust?
It is always wise, even if there are not any significant changes in your circumstances, to periodically review these important documents. 
