Charitable Trusts in Arizona: 8 Types Explained (2026)

Charitable trusts are the one corner of estate planning where the tax code pays you to be generous. Designed well, a charitable trust turns appreciated stock or a Scottsdale rental property into a lifetime income stream, defers the capital gains tax on the sale, produces a deduction this year and leaves a gift your family will be proud of. Designed badly, it is an irrevocable mistake. This guide explains the eight types of charitable trusts, how each is taxed under the 2026 rules, and where each one fits in an Arizona estate plan. It is written for families in Scottsdale, North Scottsdale, Paradise Valley and Carefree, for the financial advisors and CPAs who work with them, and for anyone weighing a gift larger than a check.

What a charitable trust is, and what it is not

Arizona law allows a charitable trust for the relief of poverty, the advancement of education, religion or science, the promotion of health, governmental purposes, or any other purpose beneficial to the community, including the support of an organization that has those purposes.^[7] That is the state-law definition. The federal tax code adds the part that matters to most donors: if the trust also benefits people, the charitable deduction is allowed only when the trust takes one of a few prescribed forms, a charitable remainder annuity trust, a charitable remainder unitrust, a pooled income fund, a guaranteed annuity or a fixed-percentage unitrust interest.^[4] A trust that splits an asset between family and charity in any other way is a valid Arizona trust and a useless tax instrument.

So charitable trusts sort into two families. Split-interest trusts divide one asset between charity and people; these are the remainder trusts and lead trusts that do the heavy lifting in a wealth transfer plan. Wholly charitable trusts benefit charity alone; the private foundation in trust form is the common example. Every one of them is irrevocable once funded, and the settlor, among others, may go to court to enforce it.^[7]

The economic idea is the same in every split-interest design. Charity's share is valued today at its present value, using an IRS interest rate that changes monthly, and the donor deducts that value. What the family keeps is the rest. Because the rate, the payout and the term all feed the same formula, small design choices move the deduction by tens of thousands of dollars on a seven-figure gift. That is why the design is finished before the asset moves, never after.

The eight types of charitable trusts

Eight designs cover nearly every charitable trust drawn in Arizona. The first four are remainder trusts, which pay people first. The next two are lead trusts, which pay charity first. The last two are the pooled income fund, a remainder arrangement run by the charity itself, and the wholly charitable trust.

1. Charitable remainder annuity trust (CRAT)

A CRAT pays a fixed dollar amount every year, set when the trust is funded at between 5 and 50 percent of the initial value, for the lives of the beneficiaries or a term of up to 20 years, and the present value of charity's remainder must be at least 10 percent of what went in.^[3] No additions are allowed after funding. The fixed check is both the appeal and the risk: if the trust earns less than it pays, principal shrinks. For that reason a life-based CRAT must pass a second test, that there is no more than a 5 percent probability the trust will exhaust before the beneficiaries die, unless the instrument includes the qualified contingency provision the IRS published in 2016, which ends the trust early if principal falls too far.^[8] At a 5.4 percent section 7520 rate both tests are easier to pass than they were for most of the last fifteen years. The IRS publishes sample CRAT forms, and a trust drafted to them is safe on qualification, though the samples are a floor, not a finished document.^[9] Who uses it: a donor in their seventies or older who wants a predictable payment and a simple trust, usually funded with marketable securities.

2. Standard charitable remainder unitrust (SCRUT)

A CRUT pays a fixed percentage, again 5 to 50 percent, of the trust's value as revalued every year, so the payment rises and falls with the portfolio.^[3] Additional contributions are permitted if the document allows them, and there is no exhaustion test because a percentage payout cannot empty the trust. The unitrust is the workhorse of charitable planning. It is the design behind most trusts funded with appreciated stock, it tolerates inflation better than an annuity trust, and its remainder value is computed from an adjusted payout rate that depends on the section 7520 rate and how often the trust pays.^[10] The IRS published sample unitrust forms in 2005.^[11] Who uses it: a donor in their fifties or sixties with concentrated, low-basis stock who wants a growing income and a deferral of the capital gain.

3. Net income unitrusts (NICRUT and NIMCRUT)

A net income unitrust pays the lesser of the unitrust percentage or the trust's actual net income for the year. A net income with makeup unitrust, the NIMCRUT, does the same but keeps a running account of the shortfalls and pays them out later, in years when income exceeds the percentage.^[12] The point is deferral. If the trustee invests for growth rather than income in the early years, the trust pays little, the makeup account grows, and payments come out in later years when the beneficiary needs them: a retirement plan without contribution limits. Whether capital gain counts as income is set by the trust instrument within the limits of Arizona's principal and income rules, and the drafting on that one question decides whether the strategy works. Who uses it: a business owner in their forties or fifties who will not need the income for a decade, or a donor contributing an asset that produces no income today.

4. Flip unitrust (Flip-CRUT)

A flip unitrust starts life as a net income trust and converts, or flips, to a standard unitrust on the first day of the year after a triggering event that is outside the control of the trustee or anyone else, most often the sale of an unmarketable asset such as real estate or closely held stock, or a stated date or birthday.^[12] Before the flip, the trust is not forced to pay a percentage of an asset that produces no cash. After the flip, it pays like any other unitrust from the sale proceeds. Any makeup account is forfeited at the flip, so the design is a trade: certainty of payment later in exchange for deferral now. Who uses it: an owner of Scottsdale or Paradise Valley real estate, a closely held company or pre-liquidity stock who wants the charitable trust in place before the buyer is found. Timing is everything here; see the section on assets that need care below.

5. Charitable lead annuity trust (CLAT)

A lead annuity trust reverses the order. Charity receives a fixed annuity for a term of years or a life, and what remains passes to your children or to trusts for them. The federal deduction rules require the charitable payment to be a guaranteed annuity or a fixed percentage; there is no minimum or maximum payout, no 20-year cap and no minimum share for charity.^{[4, 13]} A lead trust comes in two tax flavors. A grantor CLAT gives you an income tax deduction this year for the present value of charity's annuity, but you pay tax on the trust's income for the whole term. A non-grantor CLAT gives you no income tax deduction; the trust deducts what it pays charity each year, and the gift to your family is what counts for transfer tax. When the annuity is set so that its present value equals the amount contributed, the taxable gift of the remainder is zero. That is the zeroed-out CLAT, and it works because the IRS values the remainder as if the trust will earn exactly the section 7520 rate. Everything the trust earns above that rate passes to the family free of gift and estate tax.^{[14, 13]} The IRS has published sample lead annuity trust forms.^[15] Who uses it: a family already above the $15 million exemption, or a donor with one very large income year who wants a current deduction and a legacy for children.

6. Charitable lead unitrust (CLUT)

A lead unitrust pays charity a fixed percentage of the trust's value revalued annually, with the remainder to family. It cannot be zeroed out the way an annuity trust can, because the payment moves with the value. Its advantage is generation-skipping. When a lead annuity trust is meant to benefit grandchildren, the GST exemption allocated to it is deemed to grow at the section 7520 rate rather than at the trust's actual return, so a fast-growing CLAT leaves grandchildren partly exposed; a lead unitrust has no such rule.^[16] The IRS sample lead unitrust forms were issued in 2008.^[17] Who uses it: a multi-generational family whose lead trust remainder will run into a dynasty trust for grandchildren.

7. Pooled income fund

A pooled income fund is a charitable remainder arrangement maintained by a public charity itself. Donors contribute to the fund, receive units, are paid their share of the fund's actual income for life, and at death their units pass to the charity.^[18] There is nothing to draft and no trustee to appoint, which makes it the right tool for a gift too small to justify a stand-alone trust. The deduction is computed from the fund's historic rate of return rather than the section 7520 rate, and the donor has no control over investments, no term of years and no way to change the charity. Who uses it: a donor giving five or low six figures to a university, hospital or community foundation that runs a fund.

8. Wholly charitable trust: the private foundation in trust form

A wholly charitable trust has no family beneficiary. The most common version is a private foundation organized as a trust rather than as a nonprofit corporation: a trust instrument, a trustee and an application to the IRS for recognition under section 501(c)(3). The foundation pays a 1.39 percent excise tax on its net investment income and must distribute roughly 5 percent of its investment assets each year for charitable purposes.^{[19, 20]} A donor who funds a private foundation with appreciated property other than publicly traded stock deducts only basis, not value, which is why closely held stock and real estate belong in a remainder trust or a donor-advised fund rather than a family foundation.^[4] Arizona adds a duty most families do not know about: within 60 days after a charitable trust that is a 501(c)(3) organization is created, or a trustee accepts office, the trustee must notify the Arizona Attorney General, and the Attorney General is entitled to 30 days' notice before the trust moves out of state, dissolves, changes its purpose, goes to court or changes how the trustee is paid.^[21] Who uses it: a family that wants an institution with its name on it, wants children and grandchildren involved as trustees, and expects to give in the millions over decades. A simpler Arizona charitable trust for the support of one organization is possible under the same statute and the same notice rules.

Lifetime or at death. Every split-interest design can be written into your revocable trust or will and funded at death instead of during life. The estate takes the charitable deduction for the value of charity's interest, subject to the same form requirements.^[22] A testamentary remainder trust is the standard way to leave a large IRA to a child for a term of years with a charity at the end, and the IRS has published sample forms for testamentary annuity trusts, unitrusts and lead trusts.^{[9, 11, 15]}

The eight types side by side

Form 5227 is the annual information return for every split-interest trust; a non-grantor lead trust also files an income tax return, and a lead or remainder trust with a family gift is reported on Form 709 in the year it is funded.^{[23, 24]} Percentage limits are the individual income tax limits and are simplified; the governing sections are linked in the sources.

The 2026 tax rules every charitable trust runs into

The section 7520 rate, and the two-month lookback

Every remainder and lead trust interest is valued with the section 7520 rate, which is 120 percent of the federal mid-term rate rounded to the nearest two-tenths of one percent.^[14] For September 2026 the rate is 5.4 percent; it was 5.2 percent in July and August and 4.6 percent in January.^{[1, 2]} For a charitable transfer, the donor may elect the rate of either of the two months before the month of the gift.^[14] The benefit runs in opposite directions. A higher rate produces a larger deduction for a remainder trust, because the IRS assumes the trust earns more before charity's turn. A lower rate is better for a lead annuity trust, because a lower assumed return means a smaller annuity zeroes out the gift. In September 2026, a remainder trust uses the 5.4 percent rate and a lead annuity trust elects the 5.2 percent rate from July or August; a lead trust funded in October can still elect August's rate.

The new floor and the new cap

Two changes enacted in July 2025 apply for the first time on 2026 returns. First, an individual who itemizes deducts charitable gifts only to the extent the year's total exceeds 0.5 percent of adjusted gross income; on $2 million of income, the first $10,000 of gifts produces nothing.^{[4, 25]} Second, a taxpayer in the 37 percent bracket, which begins at $768,700 of taxable income on a joint return and $640,600 for a single filer in 2026, loses up to 2/37 of itemized deductions, so a dollar of charitable deduction is worth 35 cents rather than 37.^{[5, 26]} Corporations have a parallel 1 percent floor.^[25] Neither rule touches a qualified charitable distribution from an IRA, which is an exclusion from income rather than a deduction, and neither changes the gift and estate tax deductions for a charitable trust, which remain unlimited. The 60 percent of income ceiling for cash gifts to public charities is now permanent, and a non-itemizer may deduct up to $1,000, or $2,000 on a joint return, of cash gifts to public charities other than donor-advised funds and supporting organizations.^{[4, 25]} The practical effect is that charitable trusts now favor bunching: one large gift in a high-income year clears the floor once and carries forward.

Income limits and the five-year carryforward

The deduction for a remainder or lead interest is limited by the donor's income, and the limit follows the property and the charity. For a remainder trust, long-term appreciated property is deductible up to 30 percent of adjusted gross income when the remainder goes to a public charity and 20 percent when it goes to a private foundation; cash is limited to 50 percent and 30 percent respectively, because the 60 percent ceiling is written for cash given outright to public charities and whether it reaches a trust is unsettled. A grantor lead trust's deduction is treated as made for the use of charity, so it is limited to 30 percent of adjusted gross income, or 20 percent for appreciated property. Anything unused carries forward for five years.^{[4, 27]} A remainder trust whose remainder could pass to either a public charity or a private foundation is treated under the stricter private foundation limits, so the list of permitted remaindermen is a drafting decision with a tax price.

The $15 million exemption

The federal estate, gift and GST exemption is $15 million per person for 2026, $30 million for a married couple, indexed for inflation after 2026, with a 40 percent rate above it.^{[26, 25]} Arizona imposes none of its own.^[6] At that level most Scottsdale households will never pay estate tax, and the charitable trusts they use are income tax and income-stream tools: remainder trusts to defer gain and generate a deduction. Above the exemption, the lead trust returns to the toolkit, because a zeroed-out lead annuity trust moves the growth on a large asset to children without using any exemption at all. Our guide to high net worth estate planning in Scottsdale shows where the lead trust sits alongside the spousal lifetime access trust and the dynasty trust.

IRA money: qualified charitable distributions

An IRA owner who is at least 70 and a half may send up to $111,000 in 2026 directly from the IRA to charity and exclude it from income, and may make a one-time election to send up to $55,000 of that amount to a charitable remainder trust or charitable gift annuity that pays only the owner and spouse.^{[28, 29]} The one-time trust must be funded only with the qualified distribution, and everything it pays out is ordinary income. At $55,000 a stand-alone trust is too small to justify drafting, so in practice the election is used for a gift annuity. The larger IRA strategy is at death. Naming a charitable remainder trust as the beneficiary of a large IRA replaces the 10-year payout that most non-spouse beneficiaries now face with a lifetime or 20-year income stream; the estate deducts the value of the remainder, and the untaxed IRA balance lands in a trust that pays no income tax of its own.^{[30, 22, 3]}

Appraisals, returns and the paper trail

A charitable trust generates filings. Every split-interest trust files Form 5227 each year.^[23] A gift of property other than cash or publicly traded securities worth more than $5,000 needs a qualified appraisal and Form 8283; the appraisal is dated no earlier than 60 days before the gift and is in hand by the due date of the return.^{[4, 31, 32]} A remainder trust for anyone other than you and your spouse, and every lead trust with a family remainder, is a gift reported on Form 709.^[24] A spouse's income interest in a remainder trust qualifies for the marital deduction, so a trust for the two of you creates no taxable gift.^[33] Unmarketable assets inside a remainder trust must be valued by an independent trustee or by qualified appraisal.^[34] And a remainder trust that earns unrelated business taxable income, for instance from a leveraged partnership, pays a 100 percent excise tax on that income.^[3]

The July 2026 listed transaction

On July 9, 2026, Treasury finalized regulations naming one abuse of the annuity trust as a listed transaction: appreciated property goes into a purported CRAT, the trust sells it and buys a single premium immediate annuity, and the beneficiary reports the annuity payments as mostly tax-free return of investment instead of as carried-out capital gain under the four-tier rules.^{[35, 36]} Participants and their advisors must now disclose, and a charity whose only role is remainderman is expressly not treated as a participant.^[37] A properly drafted annuity trust or unitrust that reports every distribution on the four-tier system is not that transaction, and an ordinary remainder trust is not a shelter. The rule is a warning about promoters who market a charitable trust as a way to make capital gain disappear. It does not disappear. It is deferred, and it comes out with each payment.

Two worked examples at the September 2026 rate

Both examples are simplified illustrations computed from the formulas in the regulations at the current rate, with one payment at the end of each year. A trust measured by a life uses the IRS mortality table and the published actuarial factors, and the numbers differ.^{[10, 38, 39]}

Example 1: a $2 million unitrust that defers $1.6 million of gain

• The gift

  $2,000,000 of publicly traded stock with a $400,000 basis, to a 20-year standard unitrust paying 5 percent, remainder to a public charity, valued at the 5.4 percent September rate.

• The deduction

  About $756,600, which is 37.8 percent of the value. The adjusted payout rate is 4.74 percent and the remainder factor is 0.378.^[10]

• Year one payment

  $100,000, rising or falling with the trust's value in every year after.

• Gain deferred

  The trust sells with no tax at the trust level. The $1,600,000 gain that would have cost about $380,800 at a 23.8 percent combined federal rate is instead carried out to the beneficiary over the term, payment by payment.^{[3, 40]}

• The limits

  On a joint return with $1,500,000 of adjusted gross income, the 30 percent ceiling allows $450,000 of the deduction this year and carries $306,600 forward; the first $7,500 of the year's gifts is absorbed by the 0.5 percent floor; and the 2/37 rule trims the value of the allowed deduction from 37 cents to 35 cents on the dollar.^{[4, 5]}

The rate matters less for a term trust than for a life trust. The same gift at January's 4.6 percent rate would have produced a deduction about $5,800 smaller; for a trust measured by younger lives the swing is larger, because the assumed earnings compound over more years.

Example 2: a zeroed-out lead annuity trust for the children

• The gift

  $2,000,000 to a 20-year non-grantor charitable lead annuity trust, remainder to trusts for the children, funded in September using the elected 5.2 percent August rate.^{[14, 2]}

• The annuity

  $163,200 a year to the family's chosen charities, $3,264,000 over the term. The present value of those payments at 5.2 percent equals the $2,000,000 contributed, so the taxable gift of the remainder is zero. At the 5.4 percent September rate the annuity would have to be about $166,000, so the election saves about $2,800 a year, about $55,000 over the term.

• The result

  If the trust earns 7 percent a year, about $1,050,000 passes to the children at the end of the term with no gift or estate tax and no exemption used; at 8 percent, about $1,850,000. If it earns only 5.2 percent, nothing is left, and the charities received everything.

• The trade

  No income tax deduction for the donor, the trust pays its own income tax with a deduction for what it gives away, and the family waits 20 years. If the remainder is meant for grandchildren, a lead unitrust is usually the better design.^[16]

Which charitable trust fits: a short decision guide

Start with the asset and the income need, not the tax. The type follows.

• You want income now and hold low-basis stock. A standard unitrust, or an annuity trust if you are past 75 and want a fixed check.
• You will not need the income for ten years. A net income with makeup unitrust invested for growth, with the makeup account as the retirement reservoir.
• The asset is real estate, a closely held company or pre-liquidity stock. A flip unitrust, funded before there is a buyer, with an independent trustee and an appraisal.
• You are above the $15 million exemption and want your children to receive an asset's growth. A zeroed-out non-grantor lead annuity trust, remainder to a dynasty trust; a lead unitrust if the grandchildren are the remaindermen.
• You have a one-time spike in income this year. A grantor lead annuity trust for the front-loaded deduction, funded with assets that produce modest taxable income, so the tax you pay on the trust's income over the term stays manageable.
• You want the family's name on an institution that outlives you. A private foundation, in trust or corporate form, funded with cash and publicly traded stock.
• The gift is under about $500,000. A donor-advised fund, a pooled income fund or a gift annuity. The drafting and annual administration of a stand-alone trust are not justified below that level.

The same questions come up for the people we serve most often: owners planning a business exit or liquidity event, who fund a flip unitrust before the letter of intent; senior executives with concentrated stock; families planning in retirement who want the income stream; multi-generational families and family offices, who pair a lead trust with a foundation; and athletes and public figures, for whom the privacy of a trust matters as much as the tax.

Charitable trust, donor-advised fund, private foundation or gift annuity

A trust is not always the answer. Four vehicles compete for the same gift, and most substantial plans use two of them.

• Remainder or lead trust

  Custom terms, your trustee, income for the family or a remainder for the family, and any asset that can be appraised. Drafted and administered; the right tool from roughly $500,000 up.

• Donor-advised fund

  An account at a public charity: the full deduction at public charity limits, no filings, grants on your recommendation, but no income back to you and no family remainder. The sponsoring charity, not you, owns the fund.^[41]

• Private foundation

  Your institution: family control, reasonable compensation for family trustees, a public Form 990-PF, the 1.39 percent excise tax and the 5 percent payout. Deduction limits are lower, and non-public property is deductible only at basis.^{[19, 20, 4]}

• Charitable gift annuity

  A contract with a charity, not a trust: fixed payments backed by the charity's own assets, no trustee, no appraisal for cash or public stock, and the only vehicle that makes practical sense for the $55,000 one-time IRA election.^[29]

The combination that serves most families is a remainder trust for the appreciated asset with a donor-advised fund or a foundation named as the remainderman, so the family keeps deciding where the money goes after the trust ends.

Arizona rules that shape a charitable trust

• No state death or gift tax. Arizona has imposed no estate tax on decedents dying after 2004 and has no inheritance or gift tax, so every charitable trust here is measured against federal law alone.^[6]
• The Attorney General is at the table for wholly charitable trusts. A charitable trust that is a 501(c)(3) organization, created on or after January 1, 2009 and administered in Arizona, must give the Attorney General the trust's charitable provisions and the trustee's contact details within 60 days, and 30 days' notice of any move, dissolution, change of purpose, court proceeding or change in trustee compensation. A charity expressly and irrevocably named in a charitable trust has the rights of a qualified beneficiary, including the trustee's duty to keep it informed.^{[21, 42]}
• Cy pres. If a charitable purpose becomes unlawful, impracticable, impossible or wasteful, the trust does not fail and the property does not revert; the court redirects it to a purpose consistent with the settlor's intent. A clause giving the property to a noncharitable beneficiary instead prevails only if it takes effect within 21 years of the trust's creation, or if it returns the property to a settlor who is still living.^[43]
• Perpetuity. Arizona's rule against perpetuities does not apply to a charity's interest that follows another charity's interest, and a lead trust remainder for the family can run under the state's 500-year vesting period, which is why the remainder of a lead trust so often flows into a dynasty trust.^{[44, 45]}
• Community property. Both spouses must join in any transfer of an interest in community real property, and in practice both spouses sign every funding document for a community asset, whatever its form.^[46] The spouse's income interest is protected by the marital deduction, so a joint-life remainder trust of community property produces no taxable gift.^[33]
• Trusts you bring with you. A charitable trust created in California or another state is valid in Arizona if it complied with the law where it was signed, so a move does not require a new instrument, though a review often finds a payout, a trustee or a remainderman that no longer fits.^[47] Where a change is needed, the Arizona Trust Code's tools for trust modification and reformation apply, and the tax code allows a qualified reformation to fix a split-interest trust that misses the federal form.^[22]
• The trustee is a fiduciary. The trustee of a remainder or lead trust owes the Arizona Trust Code duties of loyalty, prudence, impartiality and accounting to the family and to the charity alike. Our trust administration practice guides trustees through the annual valuation, the four-tier accounting and the Form 5227 that a charitable trust requires.

Assets that need care before they go into a charitable trust

• Property already under contract. If a sale is a practical certainty when the gift is made, the gain is taxed to you, not the trust. In a 2023 case a donor who gave closely held shares to a donor-advised fund days before the company sold was taxed on the gain and lost the deduction for want of a qualified appraisal.^[48] The trust is funded first; the buyer comes second.
• S corporation stock. A charitable remainder trust is not an eligible S corporation shareholder, so the transfer ends the S election for every owner.^[49] Owners who want the result usually give the stock outright to a donor-advised fund or restructure before the gift.
• Mortgaged real estate. Debt on contributed property creates debt-financed income, which a remainder trust pays a 100 percent excise tax on, and the relief of debt is treated as a sale by the donor.^{[50, 3]} Pay it off or hold the property outside the trust.
• Anything the family wants to keep using. The private foundation self-dealing rules apply to remainder and lead trusts, so you, your spouse, your children and your businesses cannot buy from, sell to, lease from, borrow from or occupy trust property.^[51] A vacation home does not belong in a charitable trust the family still uses.
• Art, collectibles and other tangible property. No deduction is allowed until every intervening interest ends, so tangible property is usually sold first or given outright to a museum with a related use.^[4]
• Retirement accounts during life. An IRA cannot move into a trust without a taxable distribution; the one-time $55,000 qualified charitable distribution is the only lifetime route, and the beneficiary designation is the route at death.^[29]
• Closely held interests and unleveraged real estate. These are the best flip unitrust assets and the most demanding: a qualified appraisal, an independent trustee for valuation, a payout the trust can meet after the flip, and a flip trigger the regulations permit: the sale of the unmarketable asset, a fixed date, or an event no one controls.^{[34, 12]}

Every item on that list is a reason our tax controversy and litigation practice sits in the same office as the drafting. The plan is written by the people who would defend it.

What a charitable trust costs

We publish fixed fees. Under the firm's 2026 advanced estate planning schedule, a charitable remainder trust, whether annuity, unitrust or flip, starts at $35,000 plus $1,000 for each $1 million of funding; a charitable lead trust, grantor or non-grantor, starts at $50,000 plus $1,500 for each $1 million; and private foundation formation starts at $10,000 plus $1,000 for each $1 million, with the IRS user fee for the exemption application passed through at cost. Appraisals are third-party work, billed at cost. See the advanced fee schedule, run the fee estimator for a written range, and read how our rates and fees work. For the rest of a plan, see what estate planning costs in Arizona in 2026.

Budget for the years after signing as well: the annual Form 5227 and any income tax return, a trustee or custodian, an annual valuation for a unitrust, and, for a foundation, the Form 990-PF and the excise tax. A remainder trust under about $500,000 rarely covers those costs, which is why the smaller gift belongs in a fund or an annuity.

How a charitable trust engagement runs

Every engagement follows the same five steps, and the attorneys handle each one personally.

1. A conversation. The family, the asset, the charities, the income you need and the tax position you are in.
2. The model. We run the deduction, the payout and the gift at the current and elected section 7520 rates and show you the plan with and without the trust.
3. The design. Trust type, term or lives, payout, trustee, permitted remaindermen, and the coordination with your revocable trust and beneficiary designations.
4. The funding. Appraisal ordered, title moved, both spouses joined where community property is involved, and nothing signed with a buyer until the asset is in the trust.
5. The filings. Form 8283 with the appraisal, Form 709 where a family remainder is involved, the first Form 5227 and, for a wholly charitable trust, the Attorney General notice and the exemption application.

No engagement is formed until a written engagement letter is signed. To begin, request a consultation or call (480) 420-8268.

Where we meet clients

Our office is in the Scottsdale Airpark at 15100 N. 78th Way, Suite 203, Scottsdale, Arizona 85260. It is open Monday through Thursday from 9 a.m. to 5 p.m. Arizona time and on Saturdays by appointment, and every visit is by appointment. See all locations and appointment options.

• Scottsdale

  Within about 25 minutes of most of the city.

• North Scottsdale

  About 12 minutes to DC Ranch and Silverleaf, about 32 minutes to Desert Mountain.

• Paradise Valley

  About 17 minutes, off-peak, from the center of town.

• Carefree

  About 29 minutes from the Carefree Sundial, and serving Cave Creek.

• In your home

  Across the East Valley, and in Prescott, Prescott Valley, Sedona, Clarkdale and Jerome.

• Anywhere in Arizona

  Secure video and telephone consultations.