With the giving season ramping up and the stock market at all-time highs, now is a good time to revisit different ways of gifting to your favorite charity. Today’s spotlight is on the Charitable Remainder Trust, an estate planning tool that allows for both charitable income tax deductions as well as estate tax deductions upon your death. The trust offers the added bonus of avoiding or deferring capital gains taxes, and more importantly, can give you a personal source of income as well!
Sounds too good to be true, right?
Let’s get down to the details of a Charitable Remainder Trust:
A Charitable Remainder Trust (CRT) allows a donor to transfer property to a trust, retaining the right to receive a stream of annual payments for a term chosen by the donor. When the donor passes away, the remaining assets in the trust go to the charity. Everybody wins!
This tool can be particularly beneficial to people who have large positions in their investment accounts that have appreciated greatly in value, and which would be subject to significant taxation if the positions were sold. The Charitable Remainder Trust allows for these positions to be put to good use, generating current income to the donor and leaving significant assets to charity at death.
To find out more about using a Charitable Remainder Trust or other tax-savings strategies to make the most of your gifting plans, call our office today!