If you are considering making a gift to charity in your estate plan, own assets that have appreciated significantly, and would like to get a current income tax deduction, please talk to us about establishing a Charitable Remainder Trust (CRT).
A CRT doesn’t have to be complicated to offer compelling benefits. If you’d like to benefit a charity or multiple charities, you can establish the trust and transfer appreciated assets into the trust. As long as the trust conforms to IRS rules, the trust can then sell the appreciated assets and diversify the trust’s holdings. The CRT is tax exempt, so when the asset is sold, the trust pays no capital gains taxes. The entire amount can be reinvested.
You (or a named beneficiary) must receive a certain amount or percentage of the trust’s assets each year, and you will be taxed on the portion of each such distribution that is capital gain income. The trust can last for your lifetime, or a certain number of years, and the charity will receive the remaining assets when the trust terminates. You get an income tax charitable deduction based on the value going to the charity and the type of charity you’re benefitting.