A charitable remainder trust is an estate planning tool that can provide both financial and tax benefits to you. It allows you to transfer assets from your estate into a trust, which will then be used to benefit a charity or charities of your choosing while also allowing you to receive regular payments from the trust. With the help of an experienced attorney, you can structure a charitable remainder trust to ensure that it meets your goals and requirements.
A charitable remainder trust (CRT) is an invaluable tool for those who are looking for ways to provide long-term financial support for their favorite charities while still taking advantage of tax savings and other benefits. This type of trust has been used by donors for more than a century, and it remains popular today as an effective way to plan your estate in order to maximize its value for future generations.
A Type of Trust
A charitable remainder trust (CRT) is a type of charitable trust. There are a number of types of trusts including charitable trusts, living trusts, and others.
When you establish a CRT, you transfer some or all of your assets into the trust, which is then managed by an appointed trustee. You may choose any qualified charity or organization as the beneficiary of the CRT, although if desired, multiple charities can be named as beneficiaries. The trustee will manage the assets in accordance with your instructions and invest them so they will grow over time.
Benefits of Charitable Remainder Trusts
The tax and other benefits provided by a CRT make it attractive for many individuals seeking ways to maximize their estate’s value and support causes they care about deeply. While making a plan to support causes important to you, you will receive regular payments from the trust based on its value at inception or its current market value (whichever is greater). These payments can be made either during your lifetime or after death. When set up properly, these payments can provide a steady source of income throughout retirement while also providing significant tax savings due to deductions taken when establishing the CRT.
Charitable Remainder Trusts vs. Charitable Lead Trusts
CRTs are designed to provide tax benefits to those who contribute assets or money to charitable organizations during their lifetimes or upon death. With a CRT, the donor transfers assets or money into an irrevocable trust that will provide payments either for life or for a specified period of time. After the specified period ends, whatever is left in the trust goes to charity.
When creating a CRT, donors can choose whether they’d like payments made monthly, quarterly, or annually. They also have the option to designate which charities will benefit from their contribution.
Charitable Lead Trusts (CLTs) work differently than CRTs in that they provide payments only during their specified period rather than beyond it. With a CLT, assets are transferred into an irrevocable trust where they will generate income for charities designated by the donor over a set amount of time—usually between five and twenty years—after which whatever is left in the trust reverts back to its original owner or designated heirs/beneficiaries.
Leading Chicago Charitable Trusts Lawyer James Provenza
By working closely with charitable trusts lawyer, James Provenza, together you can develop a customized plan that takes into account both short-term cash flow needs as well as long-term objectives such as preserving wealth for future generations or providing funds for charity over extended periods of time. With careful planning and assistance from attorney Provenza who specializes in estate planning matters such as charitable remainder trusts, you can make sure that your resources are managed efficiently so they bring maximum benefit not only now but in years ahead as well. Leaving a legacy in support of a non profit you support is a wonderful objective.
Contact James C. Provenza & Associates, P.C. at (847) 729-3939 or by filling out our online form.
