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Charitable Remainder Trust

Do you own stocks, real estate, or a small business that has appreciated in value over the years? If so, you may have realized the problem you’ll face when you’re ready to sell. The taxes you’ll owe from the sale could wipe out much of the gain you’ve worked so hard to build up. Fortunately, a tool was created in the tax-code to help people just like you, called a Charitable Remainder Trust (CRT).

A CRT can allow you to make a large charitable gift, receive a charitable deduction in the year that it is established, and receive income for a number of years as well – a real win/win!

These types of tools can become complicated, but here is how to create a Charitable Remainder Trust

  1. Create a Charitable Remainder Trust (CRT)

    You establish a Charitable Remainder Trust with an attorney, and transfer an asset (like appreciated stocks, property, or a business) to the CRT.

  2. Receive a partial tax deduction

    You are eligible to receive a partial tax deduction for this gift in the year the CRT is established.

  3. Receive an annual income

    The CRT pays you (or anyone you name) an annual income for a set period of time (typically 20 years or less).

  4. Pass the trust to a charity after your death

    Upon your passing, anything left in the trust passes to the charity named as the beneficiary when the CRT was established.

Many people have found that a charitable remainder trust provides a greater benefit to themselves and to their charity than they would have received without. In fact, donors who use this tool say they enjoy, “better living through better giving!”

You’ll need an attorney knowledgeable about this tool to help you set this up. If you or your attorney aren’t familiar with this tool, or would like to hear about how it’s helped donors like you, please contact us to learn more.

“Having children myself, I imagined what it would be like for them to not have a home. I always want to help.”

– Sabina

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Philanthropic information presented herein is intended for friends and supporters of Mercy Home for Boys & Girls. This material may be helpful in your tax and financial planning, and is based on current laws and recent court decisions. You should consult your own legal, tax, or financial planner to determine how these gift vehicles may apply to your own situation.