| What is a Charitable Remainder Trust? A CRT is a tax-advantaged, irrevocable trust that can provide you with lifetime income and immediate tax benefits. Charitable remainder trusts are one of the most favored means of transferring assets! With a CRT you have a split interest trust, which basically means there is more than one beneficial interest in the trust. One interest belongs to the person(s) that will receive income from the trust during their life (lives), this could be yourself and/or anyone you so designate. The second interest would belong to the charity that you select to receive the trust’s assets after the death of the last surviving income beneficiary. You will need to identify the qualifying charity when the trust is set up, however the trust may permit the charitable beneficiary to be changed prior to death. The trust itself is a tax-exempt entity and therefore assets should be transferred into the CRT before being sold so as to avoid capital gains tax. These assets can be property, stocks, mutual funds, CD’s, etc…, there is no tax on the transfer of property into the CRT. Because the trust is irrevocable and holds assets for the benefit of a charitable organization, you receive a charitable tax deduction in the year of transfer. The CRT can be set up with an initial lump sum or you may add assets over time as an estate tax planning option. Once the trust is established, no alterations may be made, except for certain limited exceptions. |