Charitable Remainder Trust

A Charitable Remainder Trust (CRT) is the “big brother” of the Charitable Gift Annuity.  The CRT serves several purposes:

  • It is a tool to avoid or reduce capital gains, income and death taxes
  • It is a tax-friendly investment vehicle providing a stable income stream
  • It is a method of generating more income from an asset versus selling it for reinvestment

A CRT is an irrevocable trust that provides an annual payout to a non-charitable beneficiary.  At the end of the non-charitable interest, the remainder is paid to the charity.  The non-charitable interest may be for a lifetime (typically, the lifetime of the donor or donors) or it may be for a specified period.

There are several tax advantages to a CRT, including those related to income tax, capital gains tax and estate or inheritance tax.  Each of these benefits is specific to the terms of the CRT and the asset that is used to establish the CRT.

Two payout options are available:

  • A payment based on a fixed percentage of the value of the assets at the time of creation; this amount does not change irrespective of appreciation or depreciation of the CRT.  With this payment option, no additional contributions are permitted.
  • A unitrust payment based on a fixed percentage of the CRT revalued on January 1st each year; this amount does vary with the appreciation and depreciation of the CRT from year to year. Additional contributions are permitted.

Call us to discuss how a Charitable Remainder Trust will benefit you and assist Stewards Foundation in our service to assemblies of the Lord’s people and their commended workers.