What is a Charitable Remainder Trust?

A charitable remainder trust (CRT) is a trust where there are two separate and distinct “beneficial interests” also known as “split interests.”  This means that two different entities have an interest in the assets of the trust.  These two interests are usually the “income interest,” which means income from the trust, and the “remainder interest,” which means what is left over at the termination of the trust.  In a CRT, a non-charitable beneficiary receives t he income interest and a charitable beneficiary receives the remainder interest.

A properly drafted CRT can allow the creator of the trust to take a Federal income tax deduction, as well as provide an income stream for life.

Is it possible that I might be able to increase my income and reduce my taxes at the same time by using a Charitable Remainder Trust?

Yes, depending on your circumstances.  If you hold property which has considerablly increased in value since you purchased it, you may incur a capital gains tax if you sell the property.  A properly drafted Charitable Remainder Trust will allow you to donate the property to the trust and take an income tax deduction and establish an income stream for yourself.  If the property is currently producing little or no income, the income stream from the trust may increase your present income as well.

Call us to learn more about CRT’s (909)981-6177.

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