A Charitable Remainder Trust (CRT) is a powerful estate planning tool that allows you to support charitable causes while securing financial benefits for yourself or your loved ones. It offers a way to turn appreciated assets into income, reduce taxes, and leave a lasting legacy.
How Does a CRT Work?
A CRT is an irrevocable trust that provides income to you (or designated beneficiaries) for life or a set period. After the term ends, the remaining assets go to a charity of your choice. There are two main types:
- Charitable Remainder Unitrust (CRUT): Pays a percentage of the trust’s annually revalued assets, allowing payments to fluctuate with investment performance.
- Charitable Remainder Annuity Trust (CRAT): Pays a fixed amount annually, offering more predictable income.
Key Benefits of a CRT
- Tax Advantages: You may qualify for an immediate charitable income tax deduction and avoid capital gains taxes when funding the trust with appreciated assets.
- Income Stream: The trust provides you or your beneficiaries with a steady payout.
- Philanthropic Legacy: At the end of the trust term, the remaining assets support a cause meaningful to you.
Is a CRT Right for You?
A CRT is ideal for individuals with highly appreciated assets who want to support charity while minimizing taxes and securing financial stability. However, it is irrevocable and requires careful planning.
If you’re interested in exploring how a Charitable Remainder Trust fits into your estate plan, reach out to our experienced team at TrustCounsel to discuss your options. Visit our contact page to find the office nearest you or fill out our online form, and we’ll be in touch to schedule a convenient appointment.