Enabling You To Help Others
A charitable remainder trust (CRT) can provide important tax benefits for its grantors and beneficiaries. Assets in a CRT are ultimately ceded to a charity of the grantor’s choosing. The interest those assets are expected to accumulate can be used to claim a charitable income tax deduction. Likewise, when you die, your estate will receive a charitable estate tax deduction. As such, the benefits of a CRT can be substantial.
Quinlivan & Hughes, P.A., has assisted individuals throughout Central Minnesota in the establishment of CRTs. We know how to structure them to maximize tax relief, and how best to support the charities they are designated to fund. For more information, call our offices at 320-200-4928, or schedule an appointment with one of our estate planning lawyers online.
How Will A CRT Help Me?
A CRT is based upon the concept that the ownership of property may be separated into a current time period, during which the beneficiaries receive annual payments, and a future time period, when ownership of the property is given to charity.
If you create a CRT during your lifetime, you will be entitled to receive a charitable income tax deduction based upon the calculated value of the interest the charity will earn on your property. With careful planning, you may be able to use that deduction over a period of six years starting with the year in which the CRT was created — an excellent tax benefit.
You may have property that has appreciated substantially and will be subject to capital gains tax if you sell it. If you create a CRT and transfer the property to the CRT, the trustee can subsequently sell the property free of capital gains tax.
When you die, the fair market value of the property in the trust will be included in your gross estate for estate tax purposes. Your estate, however, will be entitled to a charitable deduction for the value of that property. Accordingly, property that you give to a CRT is effectively removed from your estate for estate tax purposes.