Retirement Remainder Trust

A client who wishes to provide retirement security for a personal nurse, housekeeper or other household employee may wish to consider a charitable remainder trust.  The trust is tax-exempt, like other retirement plans, with payments made for the life of the employee.  There are no complicated funding formulas or limitations on contributions.  A portion of the income interest may be subject to gift or estate tax, although the value could be completely sheltered by the $5.43 million applicable exclusion amount.  There would also be a charitable deduction for the value of the remainder interest.

A charitable gift annuity is also an option, although if arranged during the client’s lifetime, the gift annuity should be funded with cash, rather than appreciated securities, to avoid having the client subject to immediate capital gains tax on the value of the annuity interest.


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