When it comes to supporting a charitable organization, philanthropically minded individuals have many options from which they can choose. Some people wish to donate their time or expertise while other people wish to donate their assets, be they financial or otherwise. While financial contributions may be made during a person’s lifetime, it may be necessary for a person to safeguard some of their assets to provide for their own needs while they are still alive. Some types of trusts allow this to happen while also setting up a path for funds to flow to a charity upon the person’s death. These are called charitable remainder trusts.

As explained by Barron’s, there are limits on how much of a trust’s assets must be preserved for the charity and how much income the individual setting up the trust may receive each year. Upon the death of the person who established the trust, the assets go to the designated charity or charities as multiple charities may be supported via these trusts.

According to Fidelity Charitable, charitable remainder trusts are irrevocable but come in different forms based on a person’s wishes. One type is a charitable remainder unitrust. With this trust, a person may add new assets to the trust at any time. Every year, the person receives a fixed percentage of the trust’s assets as income.

With a charitable remainder annuity trust, a person may not add new assets to the trust. The annual income received via these trusts is a fixed dollar amount rather than a fixed percentage of the trust’s value at the time.