THE CHARITABLE REMAINDER TRUST

When a donor wishes to benefit both human beings and charitable causes, he can use a charitable trust. The most common such trust is called a charitable remainder trust (CRT). Its name derives from the fact that humans receive the income benefits ... and charity receives the remainder.

In one of its most common forms, the CRT is designed to benefit husband and wife for their lives ... and one or more charitable causes at the death of the last to die.

Assets are placed into the hands of a Trustee who is directed to pay a percentage, or an amount, to the spouses, generally every quarter. When the last spouse dies, the Trustee's instructions require him to benefit the charitable causes named in the trust instrument.

The CRT is most useful for donors who have a taxable estate and who have donative intent. In addition to the satisfaction of making a gift to their favored causes, the donors can realize several economic benefits.

When the trust sells assets, it pays no capital gains tax; thus, donors may receive income off of a larger corpus than if they had sold the asset and paid capital gains tax.

When placing assets into a CRT, donors receive an immediate income tax deduction ... even though charity may not benefit for many years.

If the donors choose, they can delay the payment of income and, eventually, receive a greater income. This approach creates a retirement plan. When this approach is used, the CRT is sometimes called a Retirement Trust.

The best asset to transfer to a CRT is one that has appreciated in value while owned by the donor.

To leave assets to our institution through a CRT, contact an estate planning attorney ... or call us. We will be happy to give you names of attorneys who understand and use the CRT.

Just tell your attorney that you want "The Foundation" to be a CRT  "remainderman."