Charitable Remainder Trusts

If you plan to leave a portion of your estate to charity but still need the income from your assets you can use a Charitable Remainder Trust (CRT) to take an immediate tax deduction and retain the income generated from donated property for life.

Immediate tax savings are available with Charitable Remainder Trusts

When you donate assets to a charitable remainder trust you retain a life interest, typically in the form of an income stream or the use of an asset. Because the assets are transferred into an irrevocable trust it is considered a gift of a present interest and you are permitted to take a deduction and reduce taxable income at the time you transfer assets. The value of the deduction will be based on the value of the remainder interest you are leave to one or more charities. This is determined based on the value of the asset and the actuarial time frame you are expect to enjoy its use.

Retained interests in Charitable Remainder Trusts

There are two basic flavors of charitable remainder trusts; Charitable Remainder Annuity Trusts (CRATs) and Charitable Remainder Unitrusts (CRUTs). With a charitable remainder annuity trust the assets are valued once at the time of transfer and a fixed payment is made to you or your designated beneficiary for the rest of your life. If your primary objective is to maximize the value of the charitable deduction, the annuity trust is usually a better option. With a unitrust, the assets are revalued each year and a percentage of that asset base is distributed to your or your beneficiary. The advantage of a unitrust is that it can provide inflation protect not available through the annuity trust.

We can help you:

  • Determine if a charitable remainder trust is right for you
  • Determine the most appropriate assets to transfer to the charitable remainder trust
  • Advise on compliance matters to related to tax-exempt entities
  • Provide representation for inquiries, audits and assessments

Call us today for a free consultation.

When you donate assets to a charitable remainder trust you retain a life interest and you are permitted to take an immediate tax deduction for the remainder interest left to charity. Podraza CPA can provide expert guidance to individuals looking to use charitable remainder trusts as part of there estate plans.