A Charitable Remainder Trust (CRT) is the “big brother” of the Charitable Gift Annuity. A CRT serves several purposes:
- It is a tax-friendly investment vehicle providing a stable income stream
- It can be a method of generating more income from an asset if the alternative is selling it for reinvestment
A CRT is an irrevocable trust that provides an annual payout to the donor, or someone selected by the donor. At the end of the donor’s life, the remainder is paid to the charity. Payments to the donor may be for a lifetime or for a specified period of time.
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 with the of appreciation or depreciation of the investments in 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 varies with the appreciation and depreciation of the CRT form 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.