A charitable remainder trust pays income to you, or to someone you name, for life or for a set term of years, and then passes whatever is left to the charities you chose. It is one of several ways to leave money to charity. The others are a charitable bequest in your will, a beneficiary designation on an account, and a charitable lead trust, which runs the same idea in reverse.
Which one fits depends on the size of the gift, the kind of asset involved, and whether anyone needs income from that asset while they are alive. Here is what each instrument actually does.
What a charitable bequest is, and the four kinds it takes
A bequest is the part of a will that says who receives what. A charitable bequest is the same instruction with a charity named as the recipient. It takes effect only at your death, and until then you can change it or take it out at any time.
The law draws one fine line. Traditionally a bequest passed personal property, such as money, investments or belongings, while a devise passed real estate, though a will that clearly means to leave land by bequest is read that way, as Cornell Law School’s legal encyclopedia explains. Bequeath is simply the verb: you bequeath a bequest.
Four shapes cover almost every charitable gift made this way.
- Specific bequest — a named asset such as a particular account, vehicle or piece of property. A stated dollar amount paid from the estate’s general assets is, strictly, a general bequest, though most people treat the two together.
- Percentage bequest — a stated share of the estate. The gift moves with the estate’s value instead of being frozen at whatever the figure meant on the day you signed.
- Residuary bequest — whatever is left after debts, expenses, taxes and every other gift have been paid. This is often the largest gift in an estate.
- Contingent bequest — takes effect only if the people named ahead of it are no longer living. It is how many people make a first charitable gift without changing what their family receives.
Gifts to qualified charities are deductible against the taxable estate, and that estate tax deduction is not capped the way lifetime income tax deductions are. Kansas imposes no state estate tax and no inheritance tax, so for a Kansas estate the federal rules are the ones that matter, and most estates never reach the federal threshold at all. Your own tax advisor should confirm where you stand, because the thresholds move.
A bequest or a donation now?
People often weigh a bequest donation against simply giving today. The money can end up in the same place. What changes is timing, control and tax.
- A gift made now reaches the charity this year. If you itemize, it may also be deductible on your income tax return, within the limits in the IRS rules on charitable contribution deductions.
- A charitable bequest costs you nothing while you are alive. You keep the asset and can change your mind, and the gift is deducted from your estate rather than from your income.
- Most estates never owe federal estate tax. The IRS filing threshold for deaths in 2026 is $15,000,000, so for most families the case for a bequest is control and purpose, not tax.
The two are not either-or. A smaller gift now lets you watch a fund at work, and a bequest can complete it later.
The assets your will does not control
This is the step people miss. Retirement accounts, life insurance policies, annuities and payable-on-death bank accounts pass by the beneficiary form on file with the institution that holds them. A will does not override that form. If a charity is meant to receive an IRA, the change is made on the beneficiary designation, not in the will, and rewriting the will does nothing.
There is a tax logic to it too. A traditional retirement account left to an individual is taxed as income when they draw it down; left to a charity, it is not taxed at all. The account that costs your family the most is often the cheapest thing you can give away. The mechanics of that are set out in the guide to donating a retirement plan to charity.
How a charitable remainder trust works
A charitable remainder trust, or CRT, is irrevocable. You transfer assets into it and you cannot take them back. The trust then pays a stream of income to one or more people you name (commonly yourself, commonly a spouse), either for their lifetimes or for a fixed term of no more than twenty years. When the payments end, whatever remains goes to the charities named in the trust document.
Annuity trust or unitrust
The two forms differ in how the payment is calculated. A charitable remainder annuity trust (CRAT) pays a fixed dollar amount, set when the trust is funded and unchanged afterwards; you cannot add to it later. A charitable remainder unitrust (CRUT) pays a fixed percentage of the trust’s value, revalued every year, so the payment rises and falls with the portfolio, and further contributions are allowed.
The tests a CRT has to pass
The Internal Revenue Code sets the boundaries. The payout rate must be at least 5% and no more than 50% — measured against the initial value for an annuity trust, and against the annually revalued assets for a unitrust. At the outset, the projected charitable remainder has to be worth at least 10% of what was contributed. A trust that fails either test is not a charitable remainder trust, whatever it is called.
Two features explain why advisors raise CRTs at all. The trust is itself tax-exempt, so an appreciated asset, such as a block of stock with a very low basis or ground held for forty years, can be sold inside the trust without capital gains tax falling due at the sale, leaving the full amount working. And you take an income tax charitable deduction in the year you fund it, calculated on the present value of the charitable remainder rather than on the whole transfer. The payments you then receive are taxable to you.
A CRT is also a live administrative structure: a trustee, an annual valuation, a tax return every year for the life of the trust. That cost is why it tends to come up when the asset is substantial and awkward to sell, and not otherwise.
How a charitable lead trust works
A charitable lead trust, or CLT, reverses the order. The charity receives payments first, for a term you set, and when that term ends the remaining assets go to whoever you named: usually children or grandchildren, sometimes back to you. It comes in an annuity version (CLAT) and a unitrust version (CLUT), and it can be created during your lifetime or established by your will.
The 5% floor, the 50% ceiling and the 10% remainder test do not apply to lead trusts. Tax treatment depends entirely on how the trust is drafted.
A grantor lead trust gives you an income tax deduction up front but taxes the trust’s income to you each year. A non-grantor lead trust gives no income tax deduction and instead reduces the gift or estate tax value of what eventually reaches your heirs. The second version is the more common one, and the objective is usually transfer-tax efficiency rather than an income tax break.
Which instrument does which job
| Instrument | Who gets income | When the charity receives | Can you change your mind? |
|---|---|---|---|
| Bequest in a will | No income stream | After your death, through probate | Yes, at any time while you are competent |
| Beneficiary designation | No income stream | After your death, outside probate | Yes, by filing a new form |
| Charitable remainder trust | You or people you name, first | After the income term ends | No — the trust is irrevocable |
| Charitable lead trust | Your heirs, last | During the trust’s term | No — the trust is irrevocable |
What a gift by will or trust looks like at the Miami County Community Foundation
Miami County Community Foundation is a 501(c)(3) community foundation established in 2007, working out of Paola and serving Miami County, Kansas. Its giving hub sets out the giving methods the Foundation publishes, including a section on gifts by will or trust. What a gift eventually pays for depends on the fund it lands in, and funds come in two shapes.
An endowed fund starts at $10,000. The balance stays permanently invested and cannot drop below what was put in. In Executive Director Tammy Booe’s words, “you never, you cannot fall below that amount.” Only earnings are spendable, under a 5% spending policy, so a $10,000 endowed fund makes about $500 available each year, indefinitely.
An expendable fund starts at $1,000, can be spent down to nothing, and closes once it is empty.
The fee is 2% in total: a 1% administrative fee plus a 1% community support fee, the second of which pays for the Foundation’s own operations. Setting a fund up takes seven to ten business days.
Individuals, families, businesses and churches all hold funds at the Foundation, and many of those funds began after someone died. If a gift by will or trust is what you have in mind, the useful first move is a conversation about how it would be structured (endowed or expendable, which purpose, which fund) before anything is drafted.
The wording has to come from your own attorney
Nothing on this page is a legal document, and no charity can hand you the clause that goes into your will. A will or trust has to be drawn and executed by an attorney licensed in your state, and Kansas has its own requirements for how a will is signed and witnessed. Bring your attorney the specifics: the charity’s full legal name, the form the gift should take, and the purpose if you want one attached to it.
One further step is worth taking before you sign. Tell the Foundation what you are planning. A restriction that reads clearly today can be impossible to carry out in forty years, and a purpose written a little more broadly usually survives longer. It also gives the Foundation the chance to confirm the gift can be administered the way you intend, while you are still here to be asked.
A bequest is one piece of a broader planned giving strategy, and it is worth deciding early whether the gift should be restricted or unrestricted, because that choice is written into the will itself. If the gift will be a memorial, the in lieu of flowers line is how families usually announce it.
Charitable bequests: common questions
What is a bequest in a will?
It is the instruction in a will that leaves something to a named person or organization: a sum of money, a particular asset, a share of the estate, or whatever remains after everything else is paid. When the recipient is a charity, it is a charitable bequest.
Does a charitable bequest reduce estate tax?
Yes. Federal law lets an estate deduct bequests to qualified charities before the tax is worked out, up to the value of what was given. In practice that matters only to estates large enough to owe federal estate tax. The IRS filing threshold is $15,000,000 for deaths in 2026, and Kansas has no estate tax of its own.
Can I change or remove a bequest later?
Yes. A bequest only takes effect at your death, so your attorney can update or replace the will at any time while you are able to make one. A charitable remainder trust is different: once it is funded, it cannot be undone.
Can a bequest go to a specific fund at the Miami County Community Foundation?
Yes. The question worth settling first is which fund it should name: an existing fund on the Foundation’s list of funds, or a new one. A new endowed fund starts at $10,000 and an expendable fund at $1,000. The Foundation does not supply will wording, so the clause itself comes from your attorney.
Where to take it next
If you want a gift in your will or trust to reach Miami County, the place to start is a conversation with the Foundation at (913) 404-7287 or info@micocf.org, asking how the gift would be structured rather than what to write. The question after that one is usually sequence: what to inventory, what to decide, and in what order. The estate planning checklist for charitable giving works through it. And if you are earlier than that, still deciding what you want the gift to mean, start instead with what leaving a legacy actually involves.
