Charitable Remainder Trust - Give your tax dollars to charity instead

Jensen Law Offices has a great post summarizing the mechanics and usefulness of a Charitable Remainder Trust or CRT.  A CRT is one of those great tax techniques where you get to have your cake and eat it too.  

A CRT is a split gift between a charity and your family.  For example - you leave a portfolio in a trust where your children get 7% a year for their lives, and when the child dies, the charity gets the balance of the portfolio.  Your estate is entitled to a tax deduction (since NJ still has an estate tax, this is relevant in 2010 as well as 2011 and beyond when the federal estate tax reappears).  Your children get an income stream for live, and the charity has the reminder upon their deaths.

Note that when you have a taxable estate charitable giving at its most basic is taking dollars that your family would not have gotten anyway (because they had to go to taxes) and directing them to charity. With a CRT you are compounding this by getting the tax benefits and giving the family a stream of dollars.


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David Crockett - March 2, 2010 1:57 AM

As a practicing SoCal attorney, I'm glad to see a concise, well-written article about CRT. Thanks for the post.

Albert Santos - April 11, 2010 12:38 PM

I have a CRUT. Can we make the beneficial recipient of the yearly income a Corporation instead of the original donor?

Can you review and update our CRUT. Someone told me you can make a CRUT where you can control the payouts.

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