Charitable Trust Services

Description of Services

A Charitable Trust may be an important solution in your planning – a way for you to make an irrevocable gift to charity while retaining a split-financial interest in the gift.

There are three basic types:

Charitable Remainder Unitrust (CRUT)
Charitable remainder interest to the charity and income payments to you and/or others
Charitable Lead Trust (CLT)
Income to the charity and remainder interest to you or others.
Charitable Remainder Annuity Trust (CRAT)
Income equals the initial fair market value of the contribution times the payout rate – a fixed dollar amount of income for the term of the trust, regardless of the earnings of the trust.

Characteristics

  • Recommended for values over $250,000
  • Gifts may include cash, securities and other investment interests, as well as real estate
  • Consult your own planned giving attorney or call for the name of a recommended attorney for the proper drafting of your charitable trust
  • Recommend your own investment advisor
  • Requires a trustee

Trustee Services

Because a trust is a separate legal entity, a trustee must be named. An experienced independent third party trustee such as WaterStone Support Foundation is best suited to help you through the complexities of your charitable trust.

WaterStone Support Foundation provides fiduciary oversight including:

  • Coordination with the giver’s legal, financial and tax advisors
  • Oversight of all beneficial interests
  • Distributions to income and charitable beneficiaries
  • Accounting and tax return preparation
  • Annual reporting
  • Review and evaluation of trust performance

Flexibility

When WaterStone Support Foundation serves as trustee of charitable trusts, the trust documents point the charitable interest toward a WaterStone Giving Fund. The Giving Fund gives you great flexibility in shaping the charitable interest of the trust to your goals.

The Giving Fund enables the giver to:

  • Recommend multiple favorite charities
  • Change charities as interests change
  • Name family successors
  • Recommend investment approach or investment advisor

FAQs

Why should I use WaterStone Support Foundation?

Every charitable trust must have a trustee. The responsibility of the trustee is to complete the legal and technical terms of the trust. These fiduciary responsibilities are legal promises to the grantor, the Internal Revenue Service, and the charities which will be benefited as a result of the grantors’ generosity when the trust terminates. WaterStone Support Foundation serves in this important role as trustee.

Additionally, using WaterStone Support Foundation as trustee in conjunction with a family Giving Fund at WaterStone allows the grantor to add maximum flexibility to their charitable beneficiaries selection. As grantors’ interests expand and change, charitable beneficiary preference may be modified with a simple letter of advisement to WaterStone.

Just what does the trustee do?

When WaterStone Support Foundation serves as the trustee of a charitable trust, it takes care of all the tasks necessary to achieve the charitable objectives that the grantor and his estate planner drafted in the trust including:

Management of gifts to the trust. Instead of cash, the grantor may wish to give securities, real estate, or other assets to fund the trust. WaterStone Support Foundation converts the trust assets to cash. The grantor and the professional advisor may be involved in this process, or these details may be left to WaterStone Support Foundation. Additionally, if the gift requires interim management, such as for commercial real estate, the grantor may desire to continue to provide management assistance for the asset until it is sold.

Investment of trust funds. WaterStone Support Foundation invests the funds to provide income for the trustors and growth for the trust in order to leave a substantial gift for the grantors’ favorite charities. Within approved guidelines, grantors may recommend investment strategies or nominate their own investment advisors for investment of trust assets. Other grantors may wish to rely solely upon the expertise of WaterStone Support Foundation and its Investment Committee.

Administration. WaterStone Support Foundation will provide and supervise the administration of the charitable trust, which includes:

  • Distributions to income beneficiaries
  • Valuation of trust assets at the beginning of each trust year
  • Allocation of trust earnings (4-tier accounting system)
  • Accounting for trust investment activity
  • Annual reports
  • Annual tax returns
  • Annual schedule K-1
  • Review and evaluation of trust performance
  • Work with grantor’s tax preparer regarding deductions, contributions, etc.

Is the grantor allowed to serve as his own trustee?

Yes. However, most people prefer a third party administrator like WaterStone Support Foundation to manage the trust details. If the grantors wish to serve as their own Trustees, they generally name WaterStone Support Foundation as Successor Trustee, to serve when the grantor no longer wishes to administer these responsibilities.

Does WaterStone Support Foundation replace the grantors’ legal and tax advisors?

Not necessarily. Our grantors often prefer using their own attorney to draft the trust documents according to the grantors’ specifications and in compliance with applicable state and federal regulations. The grantors’ tax advisors will continue to prepare personal tax returns. WaterStone Support Foundation prepares the Trust Tax Return (Forms 1041A and 5227, and K1’s) as well as all other necessary trust reports.

What’s the next step?

Complete the estate, financial and charitable planning process. Share a draft of the proposed trust documents with WaterStone Support Foundation for our review. Talk with the tax advisor about tax deductions and charitable trust advantages. Involve the family in the charitable objectives, and finally, contact us for our assistance in transforming preliminary objectives into realized charitable objectives.

What is the Federal Tax Identification number for WaterStone Support Foundation?

The Federal Tax Identification number for WaterStone Support Foundation is 84-1430063.

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