Charitable
Remainder Trust
Today’s Choice for Tax Advantages and Philanthropy
When planning your estate or developing a
wealth plan, you may have several different
objectives in mind. You may want to receive
important tax benefits, increase spendable
income for yourself and/or another family
member, diversify an investment, outpace
inflation or control the distribution of your assets.
You may also want to support your favorite charities. A charitable remainder
trust is a special financial vehicle designed
to meet these estate, investment and tax
planning needs. It can provide you, your
family and your estate with significant
tax and asset management advantages
today, while leaving a lasting legacy to
your favorite charities for years to come.
Morgan Stanley offers sophisticated
trustee and investment solutions for charitable remainder trusts. Working with a
Morgan Stanley Financial Advisor, a team
of trust professionals can show you how
these time-tested estate and investment
planning tools can provide unique tax
and philanthropic solutions for you, your
family and your favorite charities.
The sophisticated
planning solution
for you, your loved
ones and your charity
of choice.
Charitable Remainder Trust
How a Charitable Remainder
Trust Can Benefit You
The tax-exempt status of a charitable remainder trust enables
it to offer significant tax advantages.
The charitable remainder trust was established by the
Tax Reform Act of 1969 to introduce substantial reform
for charitable giving arrangements. Over the ensuing years,
thousands of families have enjoyed the increased cash flow
and tax savings resulting from this trust.
The charitable remainder trust has become, and remains,
one of today’s most effective and efficient estate planning
vehicles. By establishing a charitable remainder trust, you can:
Escape immediate recognition of capital
gains taxes on the sale of appreciated assets
Increase spendable income while reducing risk by
diversifying a concentrated investment in your portfolio
Receive a current-year, charitable income tax deduction
Reduce estate tax liabilities faced by your family
Make substantial future contributions to your favorite charities.
2
Morgan Stanley | 2015
A charitable remainder
trust’s tax, financial and
philanthropic benefits
have transformed this
once-obscure trust
into one of the key
components of a wellcrafted estate plan.
Charitable Remainder Trust
The Structure of a
Charitable Remainder Trust
A charitable remainder trust is a future gift to charity with current tax, investment
management and income benefits for you and your family. For example, you make a donation
of appreciated assets to any charitable organization you choose but instead of giving the
assets directly to the charity now, you give them on a deferred basis through an irrevocable
trust. This allows you to delay the final transfer of your donation to the charity for many
years, or possibly several lifetimes, as you designate in your trust agreement. In addition to
possibly receiving an immediate income tax savings from funding the trust, you and other
beneficiaries you choose may receive a stream of income from the trust.
Like any other trust, a charitable remainder trust is a legal arrangement you
create to transfer assets to a trustee for
a specified period of time (the “term”).
The term may be one life, multiple lives,
a term of no longer than 20 years or a
combination of lifetimes and a term of
years. You can name yourself and/or your
spouse or possibly another noncharitable
individual as beneficiary.
The trustee has a fiduciary duty to
follow the instructions you and your attorney include in the trust agreement
for the management, use and eventual
transfer of the property. Throughout the
trust’s term, the trustee is obligated to
use the assets only for the benefit of the
individuals and charitable beneficiaries
you select. The trustee is also responsible
for complying with tax rules and regulations governing charitable trusts.
At the end of the trust’s term, the trustee
generally delivers the assets remaining in
the trust to the charitable organization(s)
named in the trust agreement. You can
retain the right to change the charitable
beneficiaries from time to time.
GRANTOR (YOU)
1
2
You transfer appreciated assets held
longer than one year to an irrevocable
trust that names one or more qualified
charities as beneficiary.
You (and possibly other family members) receive lifetime income from the
trust, as well as an income tax deduction equal to the present value of the
charity’s remainder interest.
CHARITABLE REMAINDER TRUST
3
Trustee sells appreciated assets—and avoids immediate capital gains taxes—at
full market value and reinvests proceeds in diversified, income-producing assets
that grow tax deferred.
4
When you (or the last lifetime
beneficiary) die, remainder of
trust assets goes to charity.
CHARITY(IES)
Morgan Stanley | 2015
3
Charitable Remainder Trust
Escape Immediate
Capital Gains Taxes
Investment appreciation brings potential tax liability in the form of unrealized capital gains.
When you wish or need to sell appreciated assets, the long-term federal capital gains tax
rate of 20% can erode a significant portion of your gains.
To avoid this tax burden, many individuals simply hold onto appreciated assets. This
can increase one’s investment risk by creating a concentrated, nondiversified portfolio.
A charitable remainder trust, however, can unlock the value of the appreciated assets
without immediately turning over 20 cents of every gained dollar to the IRS.
As a general rule, a charitable remainder trust is tax exempt. Once you transfer an
appreciated asset—such as stock or real estate—to the trust, the trustee is able to sell
that asset without paying immediate capital gains taxes. The sale proceeds, undiminished
by capital gains taxes, are reinvested in a diversified portfolio designed to generate
continuing income for you or any other income beneficiary you name. Keep in mind,
however, that the capital gains taxes may apply when income is distributed from the trust.
Escaping Capital Gains Tax:
An Example
Jim’s stock in XYZ Company, which he
has held for a number of years, is worth
$2,000,000. As he nears retirement, he
would like to sell the shares to diversify
his holdings and increase his spendable
income. However, with an unrealized
profit of $1,800,000 on the stock, Jim is
reluctant to pay the $360,000 in capital
gains taxes to the IRS ($1,800,000 x
20%). He would rather have $2,000,000
4
Morgan Stanley | 2015
reinvested and working for him instead
of $1,640,000. To avoid the capital gains
taxes and diversify his portfolio, Jim
will transfer his stock to a charitable
remainder trust. The trustee will sell
the stock and neither Jim nor the trust
will have to pay immediate capital gains
taxes. The full value of the sale proceeds will be reinvested by the trustee
in more diversified and potentially
greater income-producing investments.
A charitable remainder
trust can unlock—and
diversify—assets you
may be reluctant to
sell because of capital
gains tax liabilities.
Charitable Remainder Trust
Costly Alternatives
If one of your tax and investment
planning goals is to sell appreciated
assets and avoid immediate capital
gains taxes, a charitable remainder
trust may be a good strategy for you.
Alternative strategies available to you
can be more costly.
Many individuals choose to do nothing. Retaining appreciated assets is an
alternative that avoids capital gains
taxes and preserves assets for heirs.
However, this alternative achieves few
lifetime benefits for you. The assets
are still:
• Nonproductive – The shares
of stock you own may have reached
a narrow trading range and future
gains are not guaranteed. This can
also apply to estate values.
• Low-yielding – Nonproductive
assets may provide little
spendable income.
• Large unrealized gains –
Doing nothing still leaves you with
the central problem of owning
highly appreciated assets that, if sold
outright, will result in immediate
federal, and perhaps state, capital
gains tax liability.
• Subject to investment risk –
Holding a large percentage of wealth
in the stock of one or a few companies
may subject your investment portfolio
to more risk. Most investment experts
agree that diversification and proper
asset allocation may help reduce
exposure to risk and help mitigate the
effects of market volatility on your
portfolio.
• Subject to estate taxes –
Assets in your estate are subject to
federal estate taxes.
Another alternative individuals
can choose regarding their highly appreciated assets is to sell the assets
outright. This is often the most costly
choice. As Jim’s example illustrated,
selling his stock worth $2,000,000 results in a capital gains tax payment of
$360,000. This would leave him with
substantially less money to reinvest for
income-producing purposes. The payment of the tax, together with estate
tax costs, could also result in a smaller
legacy for his heirs.
The charitable remainder trust alternative makes sense because it defers
the recognition of capital gains taxes
and provides additional income and
estate-planning opportunities.
The Appreciated Asset Dilemma
Selling the
Assets Outright
Using a Charitable
Remainder Trust
Market value
(cost basis is $200,000)
$2,000,000
$2,000,000
Federal tax on capital gain
($1,800,000 profit x 20%)
[$360,000]
$0
Amount available for reinvestment
$1,640,000
$2,000,000
First year’s pretax
income payment at 7%
$114,800
$140,000*
*This is an example of one possible payout percentage. Your individual needs, tax situation and anticipated investment returns will determine the optimum payout method.
Morgan Stanley | 2015
5
Charitable Remainder Trust
Increase
Spendable Income
Besides deferring capital gains taxes, a charitable remainder trust can also be an effective
strategy to generate more income potential from your assets.
If you have appreciated assets that are yielding relatively little spendable income, you
could simply sell the assets and replace them with potentially higher-yielding investments.
But, as described, making this exchange can be very costly because of the immediate capital
gains taxes on the sale. Paying federal capital gains taxes (and perhaps state capital gains
taxes) may leave you with much less of your sale proceeds to reinvest for higher income.
With a charitable remainder trust, you transfer your appreciated assets to the trust. The
trustee sells the appreciated assets and reinvests the entire sale proceeds in a potentially
higher-yielding and more diversified portfolio. You can then receive income payments from
the trust that may, on an after-tax basis, be greater than any income you may have been
receiving from holding the assets.
Determining Income Payments
Several factors that determine income
payments must be considered. The factors include the overall value of the
assets in the trust and the age and life
expectancy of the beneficiaries. It is
important to note that income received
from the charitable remainder trust
will determine the size of the charitable
income tax deduction available upon
the eventual transfer to charity.
A charitable remainder trust pays
income to the beneficiary (which may
be you, your spouse and/or children)
in two basic ways—in the form of an
annuity trust or unitrust. The method
chosen, which cannot be changed after
the trust is established, affects the size
of your tax deduction.
6
Morgan Stanley | 2015
• Charitable Remainder Annuity
Trust – This type of trust provides
fixed, annual income payments. The
amount, usually paid in quarterly
installments, is to be specified in
dollars or as a percentage of the
initial fair market value of the
trust. The annuity payment amount
does not vary during the term of
the trust, regardless of how much
the market value of the trust may
change. You cannot make additional
contributions to a charitable
remainder annuity trust. Investment
performance of the trust’s
remaining assets does not affect the
income payout.
• Charitable Remainder
Unitrust –This type of trust
provides annual payments based on
the value of the trust’s assets. These
payments are equal to a percentage
of the value of the trust as it is
revalued each year. Thus, a unitrust
could provide an increasing annual
income stream or, in the event of a
decrease in principal value, lower
annual payments. If the document
provides the option, you may add
to the unitrust’s principal at any
time. Such additions are deductible
within the same limits that apply
to the original principal. Adding to
the principal can raise your annual
income and/or counter any erosion
of the trust principal in a year when
the investment return is less than
the percentage distributed from
the trust.
Charitable Remainder Trust
Minimum Remainder and Income
Requirements
To qualify for the federal income tax
charitable deduction, the present value
of the deferred charitable gift must be
at least 10% of the trust’s initial value.
Meeting this test requires an actuarial
calculation considering the ages of the
beneficiaries and selected annual payout rate. In addition, an annuity trust
or unitrust payout percentage cannot
exceed 50% or be less than 5%.
After the initial asset valuation,
the minimum charitable remainder
requirement remains satisfied even
if changing market values push the
remainder value below 10% of the
trust’s initial asset value. However,
any subsequent contributions to the
trust must satisfy the 10% minimum
remainder requirement.
Annual payments
from the trust often
represent a new
stream of income.
Annuity Trust and Unitrust: An Example
Charitable Remainder Annuity Trust
Charitable Remainder Unitrust
Trust assets
$500,000
$500,000
Annual payout
$35,000 – grantor has selected 7% of the
trust’s initial fair market value
$35,000 first-year payout based on 7% rate;
income payments may change as 7% rate
applies to trust’s fair market value, revalued each year
Deductible amount
$90,640
$116,450
Amount of potential federal income tax
savings at a 39% rate
$35,440
$42,532
*This chart assumes each trust provides lifetime incomes to spouses, each age 65, and that the applicable federal interest rate at the time each trust is
created is 6.0%. The IRS publishes this rate each month and it varies according to prevailing interest rates.
Morgan Stanley | 2015
7
Charitable Remainder Trust
Receive a Current-Year
Income Tax Deduction
Even though the charity will not receive your contribution
until a future time, your irrevocable gift qualifies for a federal
(and sometimes state) charitable income tax deduction in the
year you fund your charitable remainder trust.
Your Deduction Amount
Your deduction will be less than the
total value of the trust assets contributed because it is reduced by the value
of the payments you and/or your beneficiary will receive from the trust.
The deductible amount is the net fair
market value of the property placed in
the trust (assets must be held longer
than 12 months) minus the present
value of the payments to be made to
you and/or your beneficiary. The deduction, which is available only if your
trust meets all IRS requirements, is
calculated using mandatory Internal
Revenue Code formulas, interest rate
assumptions and life expectancy tables
(or the term of the trust if it is a fixed
number of years).
Higher income payments or a longer
payment period reduces the amount
(remainder) you can deduct. Conversely, lower payments or a shorter payment
period raises the deductible remainder.
So, when planning your trust with your
8
Morgan Stanley | 2015
attorney and your tax advisor, you will
need to balance your tax situation and
income requirements, the age of the
beneficiaries and the term of the trust.
This will help you determine how much
income you will draw from the trust.
General Deduction Limits
You may not be able to use the entire
amount of your charitable deduction
in one tax year. Under tax law rules,
a deduction for a charitable donation
is capped at a percentage of adjusted
gross income. The percentage depends
on the type of property contributed
and the type of charity receiving the
donation. A five-year carry forward is
available for any amounts you cannot
deduct in the year you fund your trust.
Higher-income taxpayers are subject to
a reduction of certain itemized deductions, including charitable deductions.
Your tax advisor will be able to tell you
if and how this reduction applies to
your individual situation.
A charitable
remainder trust can
assist you in yearend tax planning.
Charitable Remainder Trust
Sample Tax Deductions From Charitable Trusts
Charitable Remainder Annuity Trust
The following chart illustrates
charitable deduction amount possibilities.
Charitable Remainder UNITRUST
Account
Value
Years of
Income
Annual Payment Amount
Charitable
Deduction
Account
Value
Years of
Income
First-Year Payment Amount
Charitable
Deduction
$500,000
10
$35,000
$242,397
$500,000
10
$35,000
$244,645
15
$35,000
$160,073
15
$35,000
$171,135
20
$35,000
$98,554
20
$35,000
$119,716
Life
$35,000
$90,640
Life
$35,000
$116,450
10
$140,000
$969,586
10
$140,000
$978,580
15
$140,000
$640,292
15
$140,000
$684,538
20
$140,000
$394,214
20
$140,000
$478,864
Life
$140,000
$362,560
Life
$140,000
$465,800
10
$350,000
$2,423,965
10
$350,000
$2,446,450
15
$350,000
$1,600,730
15
$350,000
$1,711,345
20
$350,000
$985,535
20
$350,000
$1,197,160
Life
$350,000
$906,400
Life
$350,000
$1,164,500
$2,000,000
$5,000,000
$2,000,000
$5,000,000
*Assumptions: 7% annual income payout; 7% rate of return on trust investments; IRS interest rate factor of 6%; married couple, each age 65, for lifetime
income payment projections. Changes in interest rate factors will change deduction amounts.
Note: Charitable remainder unitrust payment amounts are for first year only and will vary in subsequent years.
Morgan Stanley | 2015
9
Charitable Remainder Trust
Reduce Estate
Tax Liabilities
The federal estate tax exemption amount, which
represents the amount of assets you can pass
tax-free in your estate, is now indexed annually
for inflation. For 2015, the federal estate tax
exemption amount is $5,430,000 per individual or
$10,860,000 for a married couple. The maximum
federal estate tax rate is 40%.
Despite the ability of individuals to shield
more and more assets from federal estate taxes,
advanced planning may still be required. Assets you
transfer from your estate to a charitable remainder
trust will help to minimize any estate tax liabilities
you may face. The value of the charity’s interest
in the trust is removed from your estate. Only
the value of any continuing income stream will be
included as part of your estate.
10
Morgan Stanley | 2015
Federal Estate Tax
Exemption/Rates –
2004-2015
Year
Estate Tax
Exemption
Maximum Estate
Tax Rate
2004
$1,500,000
48%
2005
$1,500,000
47%
2006
$2,000,000
46%
2007-08
$2,000,000
45%
2009
$3,500,000
45%
2010
$5,000,000
35%
2011
$5,000,000
35%
2012
$5,120,000
35%
2013
$5,250,000
40%
2014
$5,340,000
40%
2015
$5,430,000
40%
Charitable Remainder Trust
Make Endowments
to Your Favorite Charities
With a charitable remainder trust, you are free to choose any qualified charitable
organization—the local museum or arts center, your alma mater, your church or synagogue,
or the local hospital or medical center. You can even name your private family foundation or
a donor-advised fund as the beneficiary of your charitable remainder trust, which helps to
ensure that your endowment will be managed and distributed according to your specifications.
You have the right to change the charity named in your trust at any time. After your charitable
remainder trust helps you, it will help a worthy cause of your choosing.
A Charitable Remainder Trust’s
Impact: An Example
Ed is a retired senior executive of a publicly traded company. Over his 30-year
career at the company, he accumulated
significant amounts of company stock,
often at a low cost basis. Now that he’s
retired, Ed would like to diversify his
stock and have a longer-term plan in
place that supports his alma mater.
Ed mentioned his goals to his
Morgan Stanley Financial Advisor. She
realized a charitable remainder trust
could fit Ed’s needs. She discussed the
trust’s tax and income benefits and how
Ed could leave a lasting legacy to his college. Ed learned that he could choose
the manner in which his contributions
would be used by his college. During his
four years at college, Ed was involved in
various sports programs. He decided
that his contributions should help the
new athletic facility that was being built.
By establishing a charitable remainder
trust, Ed was able to diversify some of
his company stock in a tax-efficient way.
He also will be receiving income from
the trust for life. At his death, the trust
assets will be paid to his college, which
was part of his original planning goal.
Now that the college knows it will be
receiving significant funds in the future,
it has recognized Ed with an engraved
plaque mounted on the school’s grounds.
In addition to the tax,
investment and estate
planning benefits that
a charitable remainder
trust provides, it
can help you leave a
lasting legacy to your
favorite charity.
Morgan Stanley | 2015
11
Charitable Remainder Trust
Wealth Replacement Strategy
The first question family members often ask is “You mean the charity will receive the money
instead of me?” Certainly, this is a valid concern.
Establishing a charitable remainder trust does mean that your family will permanently
surrender the ownership and, eventually, the benefits of the trust’s assets. This may not be a
problem if there are no living family members or they have no need for the assets. For those
family members who need or expect assets that have been transferred to the charitable
remainder trust, there is a solution. It is a “wealth replacement” strategy using an irrevocable
life insurance trust.
Irrevocable Life Insurance Trust
If you establish a charitable remainder
trust, you can use some of the income
payments to fund an irrevocable life
insurance trust. Each year, you can
“gift” money to the life insurance trust.
The trustee purchases life insurance on
your life, typically equal to the value
of the assets contributed to the charitable remainder trust. When you die,
your children or other beneficiaries
will receive the full proceeds from
the life insurance trust income- and
estate-tax free.
In addition, by establishing a life
insurance trust, the insurance proceeds will be excluded from your estate, so they won’t be taxed as part of
your taxable estate. To be effective, the
trust must meet certain requirements
to avoid the inclusion of the insurance
proceeds in your estate. These requirements should be reviewed with your tax
12
Morgan Stanley | 2015
and legal advisors. In order to establish
the life insurance trust, you must be
insurable.
Wealth Replacement:
An Example
Bill’s assets had g rown to about
$2,000,000, mostly because of a fortunate investment he made 30 years ago
in a company that has become dominant
in its market. Although his dividend
rate from the stock was not satisfactory,
Bill was reluctant to sell because he
would have to pay federal and perhaps
state capital gains taxes. So, he decided
to use a combination of a charitable
remainder trust and a life insurance
trust to raise his income and preserve
assets for his children. Bill transferred
his $2,000,000 in appreciated stock to
the charitable remainder trust.
The trustee of Bill’s charitable remainder trust sold the stock without
immediate capital gains tax consequences and reinvested the sale proceeds in a diversified portfolio with an
attractive yield. Bill’s spendable income
increased substantially. Because he was
concerned about leaving an inheritance
for his three children, Bill also set up a
life insurance trust naming his children
as beneficiaries. The trustee bought
a $2,000,000 policy on Bill’s life to
replace the assets placed in the charitable remainder trust. Each year, Bill
contributed to the life insurance trust
enough money (perhaps using some of
his extra income from the charitable
remainder trust) to pay the premium
on the policy. His children will inherit
$2,000,000 income- and estate-tax
free from the life insurance trust. Bill’s
charity, a cancer research foundation,
will receive the charitable remainder
trust’s assets at his death.
Charitable Remainder Trust
Additional Planned
Giving Strategies
Charitable Lead Trust
A charitable lead trust is a mirror image
of a charitable remainder trust. With
this type of arrangement, an annuity or
unitrust amount is paid to the charity
for a term of years. The remainder is
usually then paid to your beneficiaries
(or it can be paid to you). The trust provides an opportunity for major gift and
estate tax savings, but usually affords
no income tax savings. A charitable lead
trust is very attractive if you are already
making consistent gifts to charity on
an annual basis and you do not need an
additional stream of income.
Net Income with Makeup
Charitable Remainder Trust
A net income makeup charitable remainder unitrust (NIMCRUT) is a type
of charitable remainder unitrust that
provides an annual payout equal to
the lesser of:
• the fixed percentage of the value
of the trust revalued annually, and
• the income of the trust as
determined by state law or the
governing instrument.
The trustee maintains records for
the years when you are paid the lesser
net income and can use future income
that is earned inside the trust that is
greater than the annual percentage.
This provides payments to “make up”
for those years when the lesser amount
was paid. This type of trust is often used
as a flexible retirement accumulation
and deferred compensation planning
vehicle. With a NIMCRUT, the investments in the trust can be structured so
that in your earlier, wealth-building
years, growth of principal, instead of
dividend or interest income, is emphasized. Net income amounts paid to you
through the trust are minimal at this
time. This is especially advantageous
if you are in a higher tax bracket.
At retirement, the trust can convert
assets to potentially higher income
producing investments. “Makeup”
distributions, that is, current income
in excess of the unitrust amount that
makes up for the “shortfall” in earlier
years, can then be received by you from
the trust during retirement, which is
when you may need it most.
Private Family Foundation and
Donor-Advised Fund
You may wish to establish a Private
Family Foundation (or contribute to
a public one) during your lifetime or
upon your death, by creating a foundation in your Last Will and Testament.
Contributions to these entities are tax
deductible and, in some cases, capital
gains taxes are not applied. Most of all,
you are creating a perpetual vehicle for
the management and distribution of
your charitable wishes. A stand-alone
foundation is a private foundation that is
funded solely by the grantor. As trustee
for the foundation, you participate in the
investment strategy and management of
any distributions. A public foundation
can offer additional tax advantages, as
contributions are tax deductible based
on its market value, not its cost.
A donor-advised fund is another philanthropic option where contributions can
be directed to your favorite charity(ies)
with minimal expense or administrative
burden. When you give assets to a donoradvised fund, you are actually making an
irrevocable donation to the public charity
that operates the fund. These assets are
used to fund an account in your name,
and you can potentially receive a charitable tax deduction. The public charity
is responsible for managing assets on
behalf of all its donors. When you decide
to give to a specific charity, you do it by
making a nonbinding recommendation
for a grant. Your donor-advised fund has
final discretion to distribute grants from
your account based on your requests.
Morgan Stanley | 2015
13
Charitable Remainder Trust
Choosing Your Trustee
The trustee you select to handle your charitable remainder trust will be responsible
for administering the trust and investing the trust portfolio.
Your trustee must also carry out the terms of the trust correctly for many years.
Some of the responsibilities your trustee must handle include:
Calculating and
making trust
income payments
Meeting tax reporting and
compliance requirements
to ensure continued taxexempt status of the trust
Morgan Stanley’s “Open
Architecture” Trustee Platform
Morgan Stanley’s approach for trusts
may differ from that of other financial
institutions. We recognize that trusts
are a vital part of your overall financial
picture—one that warrants a strong
commitment to you.
Our trustee platform is “open architecture,” meaning that we pro-
14
Morgan Stanley | 2015
Keeping records of
the trust’s assets
vide you with access to an appropriate third-party corporate trustee for
your trust account. Trust Specialists
at Morgan Stanley analyze client trust
documents and situations and then
suggest a fiduciary solution for your
needs and goals. Your Financial Advisor may provide investment management services for the trust account
using the investment management
Providing answers
to questions you
or your beneficiaries may have.
resources and strategies available
through Morgan Stanley. We will help
to identify a trustee partner who is the
“best fit” for your charitable remainder trust and your particular planning
needs. Throughout the process, you
maintain your relationship with your
Morgan Stanley Financial Advisor.
Charitable Remainder Trust
What Your Corporate
Trustee Provides
Our third-party corporate trustee
partners all have experience managing charitable trusts. As trustee, some
of the administrative and fiduciary
services they will provide include:
• Assigning a professional Trust
Officer to administer the trust
• Record-keeping for all trust
transactions and activity
• Calculating initial and ongoing
annuity or unitrust payments
• Assuring the disbursements from
the trust are made in accordance
with the trust agreement and state
and federal tax laws
• Issuing monthly/quarterly
statements that reflect trust
assets, transactions and receipts/
disbursements
• Sweeping uninvested cash
balances of any amount into a money
market mutual fund on a daily basis
• Maintaining securities tax data
such as tax cost basis, acquisition
dates and tax lots
• Exercising proxies and
conversions as well as process calls,
maturities and stock dividends
• Preparing and filing annual
federal and state trust tax returns
and providing an income summary
and classification to beneficiaries for
tax filing.
Your Financial Advisor—
Your Advocate
By utilizing our corporate trustee platform for your charitable remainder
trust, a unique, interactive relationship begins, in terms of putting your
planning efforts into motion. As a local contact, your Financial Advisor is
someone to turn to for financial advice.
He or she not only works closely with
you and your attorney, but also with the
trust professionals at Morgan Stanley.
Your main contact, however, is your
Financial Advisor. He or she knows you
best and is your advocate in helping to
achieve your specific goals.
The Benefits of Planned Giving
Planned giving offers excellent financial
and charitable opportunities. Whether
you seek to sell appreciated assets, diversify, increase income, receive additional tax benefits, better control the
management and distribution of your
assets, contribute funds to your favorite
charity or all of the above, planned
giving offers excellent financial and
charitable opportunities for you and
your family.
Any decision to establish a charitable
remainder trust to meet these goals
must be carefully considered within
the context of your overall financial,
tax, estate and family situation. Trust
professionals from Morgan Stanley
and your Morgan Stanley Financial
Advisor are ready to work with you
and your other professional advisors
in evaluating your options for creating
a charitable remainder trust that will
make a lasting difference.
Morgan Stanley | 2015
15
Charitable Remainder Trust
Realizing Your Dreams and
Goals With Morgan Stanley
At Morgan Stanley, we work hard to make every client’s experience
rewarding and in line with expectations. We do this by first
understanding your unique needs—and then offering solutions to
help meet them.
As one of the world’s preeminent financial services firms—with
leading market positions in securities, asset management and credit
services—we offer a long tradition of financial strength, stability,
innovation and quality. It is because of these capabilities, in addition
to the strong synergies among our wealth advisory solutions
professionals, that individuals look to us to help meet their wealth
management needs.
Let the professionals at Morgan Stanley help you achieve your
financial and personal aspirations.
This brochure has been prepared for informational purposes only. Information
contained herein has been obtained from sources considered to be reliable,
but we do not guarantee their accuracy or completeness.
Asset allocation and diversification do not protect against loss in declining markets.
The case studies and examples presented are hypothetical and for illustrative purposes only and do not provide individually tailored investment or
wealth planning advice. The situations, actions undertaken and illustrated
outcomes do not consider the individual financial circumstances and objectives of persons who may read these stories. The actions taken may not be
© 2015 Morgan Stanley Smith Barney LLC. Member SIPC.
suitable for all investors. There can be no guarantee that the strategies or
yields depicted would be achieved.
Morgan Stanley Smith Barney LLC (“Morgan Stanley”) does not accept
appointments nor will it act as a trustee, but it will provide access to trust
services through an appropriate third-party corporate trustee.
Morgan Stanley and its affiliates, Financial Advisors and employees do
not provide tax or legal advice. Clients should consult their tax advisor for
matters involving taxation and tax planning, and their attorney for matters
involving trust and estate planning and other legal matters.
CG100 CRC1140937 (3/15) CS 8180239 04/15