A charitable remainder trust, or “CRT”, is a type of trust that provides annual payments to named beneficiaries. The payments may be made for life or for a term of years. Most importantly, the remainder interest of the trust is paid out to the benefit of a named charity. This portion of the trust is irrevocable; however IRS codes create several tax benefits for creators of charitable remainder trusts.
There are several advantages associated with CRT’s, most of them having to do with tax mechanisms. These may include:
While CRT’s require the assets to ultimately be given to a charity, these advantages create many favorable incentives for people to create such a trust. In particular, CRT’s are favorable for persons who are already contemplating transferring some of their assets to a charitable entity.
Yes- there are two basic types of CRT’s, with the difference having to do with the way that the payments are made out. These are:
A charitable remainder trust can be a useful tool for persons seeking different ways to distribute their assets. However, creating an executing a charitable remainder trust is usually quite complicated. CRT’s generally require the expert advice of a qualified tax or trusts attorney. You may wish to hire an experienced lawyer if you need help creating a charitable remainder trust. An attorney can also represent you in court if any disputes arise over a CRT.
Last Modified: 02-04-2015 12:49 PM PSTLaw Library Disclaimer
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