John Hancock Financial Services, Inc. has introduced a program to market charitable remainder trusts.
Charitable remainder trusts give donors a lifetime annual income and a tax break, but are extremely complex. Hancock has developed materials and new administrative forms designed to help clients understand and apply for a trust with a single set of materials.
Hancock has contracted with WealthNet to provide management and tax services for the trusts.
In a charitable remainder trust, a donor gives some asset to the trust, which then sells it and invests the money. In exchange, the trust pays the donor an annual income, usually for the donor’s lifetime.
The trust does not pay capital gains taxes on the sale of the asset, leaving more money for investment and therefore a larger annual income for the donor. Upon the donor’s death, the remaining money is given to the charity of the donor’s choice.