The benefits of charitable remainder trusts

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On Behalf of: Hatley Law Group, APC | POSTED ON: November 8, 2021

Residents of San Diego and other nearby areas of California may want to learn more about how a charitable remainder trust can benefit them. A CRT may potentially increase their income while living, save taxes and benefit a charity when they die.

This form of trust has been in use since 1969. It lets you use a highly valued asset, such as real estate or a stock, for a lifetime of income while reducing estate taxes after you have passed away. You can also help one or more charities that are meaningful to you.

How does it work?

You make a transfer of an appreciated asset into a form that is an irrevocable trust. Because of this transfer, your estate will no longer have to pay taxes when you pass away.

Because it is for a charity, you receive an immediate deduction for your taxes. Moreover, this asset is no longer a part of your estate.

You receive an income

The trustee sells the asset at full market value. While paying no capital gains tax, the money gets reinvestment into an income-producing asset for you. The trust will be paying you an income until you die. You do not have to take the income now but can postpone it until a later date.

Then, the income goes to charity

After you die, the remaining income will go to your chosen charities. It is for this reason that it has the name charitable remainder trust or CRT.

Income can also go to your children or spouse during their lifetimes. When it comes to charitable estate planning, the CRT has this benefit as well.

A CRT makes sense for you because it provides income now and into the future through assets that appreciate in value. It has benefits for your family as well as a charity that has special meaning for you.

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12636 High Bluff Dr., Ste. 400
San Diego, CA 92130-2071

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