What It Can Do for You:
So, let's consider just what the creation of a CRT
can accomplish for you. Properly drafted, formulated
and managed, a charitable remainder trust is an
excellent "transfer tax" avoidance instrumentality that
can
- avoid completely any capital gains tax payment
on your appreciated property, regardless of the
original cost basis;
- convert your low-yield property into a high
income investment guaranteed to provide you and your
spouse the financial security of lifetime income,
immediate or deferred, with greatly reduced income tax
consequences;
- serve as a vehicle to receive the "roll over"
of your qualified pension plan or Individual Retirement
Account (IRA), increasing both retirement income and
tax savings;
- provide you with an immediate substantial
charitable income tax deduction against your taxes for
the year in which the CRT is created;
- diminish estate and inheritance taxes on that
property - and avoid the probate mess as well; and
- allow a greatly increased inheritance for your
heirs, financed by the tax savings and increased income
your CRT will provide.
Sounds too good to be true - or to be legal in
present day, tax-oppressed America?
Read on; first about "trusts" in general for a
little background course, then about CRTs in all their
legal glory.
A point to keep in mind as you refresh your
knowledge about trusts - a charitable remainder trust
is what is known in the law as an "irrevocable living
trust," a concept we will explain in detail.
