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Charitable Remainder Trusts

A Charitable Remainder Trust or CRT is a type of trust that allows an individual to donate assets to the trust and receive income from that same trust for a specified perod. After maturity they can then donate the remaining assets to one or more non profit and/or church organizations.


CRT's are designed to reduce the taxable income of individuals and offer benefits for retiement and estate planning.


How a Charitable Remainder Trust Works

In a charitable remainder trust:

  • A donor transfers property, cash or other assets into an irrevocable trust

  • The trust's basis in the transferred assets is carryover basis, which is the same basis that it would be in the hands of the donor, for assets transferred to the trust during the lifetime of the donor

  • The trust pays income to at least 1 living beneficiary

  • The payments continue for a specific term of up to 20 years or the life of 1 or more beneficiaries

  • At the end of the payment term, the remainder of the trust passes to 1 or more qualified U.S. charitable organizations

  • The remainder donated to charity must be at least 10% of the initial net fair market value of all property placed in the trust

Charitable remainder trusts are irrevocable. Assets that go in can't be taken back.


Reasons to Create a Charitable Remainder Trust


Charitable remainder trusts can offer many benefits, including:

  • Help you plan major donations to charities you support

  • Provide a predictable income for life or over a specific time period

  • Allow you to defer income taxes on the sale of assets transferred to the trust

  • May allow you a partial charitable deduction based on the value of the charitable interest in the trust



financial data
Financial Data

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