Charitable Remainder Trusts: How To Help Others and Get A Break On Your Taxes In The Process

Charitable Remainder Trusts

A Charitable Remainder Trust otherwise known as a "CRT" is an irrevocable trust created under the authority of Internal Revenue Code § 664 ("Code"). A Charitable Remainder Trust  is a trust that lets you donate to charity and gives you and your heirs a big tax savings in the process. Typically a CRT is  funded with highly appreciated long term assets, like real estate or stocks that creates an income stream for the beneficiaries with a remainder of the trust's assets donated to one or more charities. One of the major benefits of a CRT is the potential for the grantor to take an immediate charitable deduction against the income produced by the trust for the value of the trusts assets that are to pass to the qualified charity (what is known as the remainder beneficiary. Second, a CRUT is exempt from federal tax on the income from investments it holds. Third, contributions to a charitable remainder unitrust made pursuant to a will can provide for an estate tax deduction. 26 U.S. Code Section 664 provides the requirements for Charitable Remainder Trusts.

Key characteristics

  • Potential immediate (partial) tax deduction, based on the value of the remainder gift to charity
  • May eliminate capital gains tax for gifts of long-term appreciated securities
  • Accepts many types of assets
  • Income may be for life or for a fixed term of no more than 20 years
  • Requires setup and ongoing maintenance costs

For more information on Charitable Remainder Trusts and how the may be used as part of an effective estate plan contact Antonoplos & Associates at 202-803-5676 or