Charitable Trust
The Basics of CRT’s
Essentially, you create and place assets into a Charitable Remainder Trust. You may continue to manage the assets and you receive an income stream during your lifetime. The charity or charities you designate receive the residual of the Trust’s assets after you pass away.
In return for what amounts to a pledge of assets to charity in the future, the Donor of the assets placed in the Trust receives a current tax deduction for the donation and they avoid any and all capital gains on the donated assets. This means, for example that the Donor may place his or her highly appreciated apartment building into the Trust, sell the building tax-free and reinvest the proceeds, which are then used initially to provide the income stream to the Donor.
The amount of the deduction is calculated in part based on the age of the last income beneficiary.
In addition the Donor receives partial or full elimination of the asset gifted from Federal Estate Tax calculations.