Charitable trusts give donors the ability to receive a tax deduction as well as income from the trust. This article discusses how now might be the best time to consider getting a charitable trust before interest rates rise in the near future. When a donor uses a charitable lead trust interest rates are important for the time-value-of-money calculation. The interest rate that is used to determine the net present value of the asset is called the Charitable Midterm Federal Rate (CMFR). This column discusses the difference between charitable lead annuity trusts and unitrusts and the impact that changing interest rates can have on both of them. It is a good idea for people to make the necessary arrangements for setting up a charitable trust while interest rates are still low because the Federal Reserve is expected to raise interest rates in the near future.
See Mark P. Cussen, Why You Should Set Up A Charitable Trust Now, Investopedia, December 22, 2015.
