Charitable Planning

If you were given a million dollars but you had to give it away. Who would you give it to and why? Does your will have them listed now?

Charitable Remainder Trust

You would like to make a charitable donation to a cause you care about, perhaps to a charity, or to an educational or cultural institution, but you're not quite ready to give up all the benefits of the asset you'd like to donate? By creating a charitable remainder trust (CRT) for a qualified charity, you can contribute to your charity, increase your income and save on taxes. This way, you get the best of all worlds.

A CRT allows you to convert an asset that is worth a significant amount, such as stock or real estate, into an annuity stream without having to pay capital gains taxes on the asset when it is sold. It can also help you save a significant amount on current income taxes and on potential estate taxes when you die by removing a large chunk of assets from your taxable estate.

When you transfer your asset into the irrevocable CRT, the trustee of the CRT can sell your asset without your having to pay any capital gains taxes. The money can then be re-invested into income-producing assets and you can receive an income for either the rest of your life, or for a specific term of years up to 20 years. When you die or the term expires, the money that remains in the trust goes to the charity or institution you have selected.

A charitable remainder trust really can give you the best of all worlds - you get a tax break, and a cause you care about gets much-needed funds. And you still receive income from the asset, even after giving it away. Keep in mind, while the CRT is a very useful tool, it is also complicated because tax laws are constantly changing. Please make sure to consult with your tax, legal and accounting professionals.