Charitable remainder trust (CRT)

The Charitable Remainder Trust (CRT) is one of the most efficient estate planning tools. Charitable remainder trust (CRT) provides life time income to trust beneficiaries. Charitable remainder trust (CRT) are often used in estate planning to minimize capital gains tax. Charitable remainder trust (CRT) allows tax payers to pay zero capital gains tax. A charitable remainder trust is easy to set up. The forms to set up a charitable remainder trust is about 4 pages long and takes about 10 minutes to complete.

Paying no capital gains tax

When investing, most people would want to buy low and sell high. When selling investments, tax payers incur capital gains tax. Capital gains tax reduces the profit of the sale of any investments. However, some smart tax payers found ways to avoid paying capital gains tax. These smart tax payers pay zero capital gains tax when they sell their investments. How do they manage to pay zero capital gains tax? They use Charitable remainder trust or CRT for short.

What is a charitable remainder trust (CRT)?

A charitable remainder trust or CRT is a gift plan that provides income to one or more beneficiaries. The income period provided by a charitable remainder trust (CRT) can be for life, for a fixed term of not more than 20 years, or a combination of the two. Assets such as cash, securities or real estate, are transferred to a charitable remainder trust (CRT) while the charitable remainder trust 's owner is still alive. The charitable remainder trust pays income to the beneficiaries for the term of the trust which can be the owner himself or herself. When the charitable remainder trust term ends, the remainder in the trust passes to the charity specified in the charitable remainder trust.

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