Bay Area Estate And Tax Planning Law Firm

Why a charitable remainder trust is a win-win for all involved parties

On Behalf of | Aug 10, 2015 | Trusts |

From raising money to help feed hungry children to funding cancer research, many Americans have a certain cause in which they believe and want to support both during their life and after they pass. For these individuals, a charitable remainder trust provides important benefits and tax incentives that help to not only benefit a specific charity and cause, but can also provide a future income stream for oneself, a spouse and surviving heirs.

Prior to establishing a CRT, or any type of trust, it’s important to seek the advice and assistance of an attorney who handles estate planning matters. An attorney can answer questions and help an individual determine whether or not a CRT meets his or her current and long-term estate planning goals. For example, a CRT is irrevocable meaning that once the trust is established, it cannot be revoked or stopped. However, the beneficiary of a CRT can be changed to provide for a different charity or cause.

A CRT is funded much like any other type of trust. However, unlike most other trusts where an individual designates a trustee, the individual charity also acts as the trustee and is therefore responsible for the management and investment of a trust’s assets. Also, in addition to the named charity financially benefiting through the investment and growth of a trust’s assets, an individual or his or her designated heirs will also benefit.

A CRT also affords the individual who establishes the trust with important tax liability reduction benefits. For example, assets held in a CRT can be deducted from an individual’s taxable income. Additionally, upon an individual’s death, assets held in a CRT will not be included as part of his or her estate which can mean substantial savings with regard to estate tax burdens on loved ones.

Source:, “Tax Incentives for a Charitable Remainder Trust,” Aug. 7, 2015