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Charitable Trust Termination
Complete
terminations of charitable remainder trusts are appealing for two primary
reasons. The donors no longer want or need the income, and/or they want
to give to charity in the present or near term.
At some
point during the trust term, the donor(s) may decide that they no longer
need the trust payments. The donor may at that point transfer to charity
their right to receive future trust payments. Depending on state law,
the controlling language of the trust document, and the trustmaker's charitable
inclinations, one possible solution is to create a Donor Advised Fund
with American Endowment Foundation. The donor(s) can use this Fund to
recommend grants immediately, and the family can stay involved in these
meaningful assets for future grantmaking.
Sample
Language
The following
is sample language that the donor can send to the trustee of the charitable
remainder trust to transfer his or her interest in the future payments
to charity. It is advisable to have the donor consult with their own professional
advisor.
December
31, 2004
Dear Trustee,
On February 15, 1997, I funded the Charles M. Jones Charitable Remainder
Unitrust, a one-life unitrust in the amount of $500,000. Under the trust
terms, I was to receive a quarterly unitrust payment of 6% of the Fair
Market Value of the trust as determined every January 1.
As of December
31, 2004, I hereby irrevocably assign my entire interest in the Charles
M. Jones Charitable Remainder Unitrust to the Jones Family Charitable
Fund, a Donor Advised Fund of the American Endowment Foundation - a
501 (c)(3) public charity. In assigning my interest, I understand that
I will no longer be entitled to or receive any further unitrust payments
from the Charles M. Jones Charitable Remainder Unitrust.
Sincerely,
Charles
Jones
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