CRUTs are used for a variety of reasons. Often, CRUTs can be used to save income, gift, and/or estate tax. Because the CRUT is a tax-exempt entity[14] a CRUT can be used to sell highly appreciated assets at greatly reduced tax consequences.
Definitions on what a CRUT, CRT, CRAT, Living Trusts are:
A charitable remainder unitrust (known as a "CRUT") is an irrevocable trust created under the authority of Internal Revenue Code § 664[1] ("Code"). This special, irrevocable trust has two primary characteristics: (1) Once established, the CRUT distributes a fixed percentage of the value of its assets (on an annual or more frequent basis) to a non-charitable beneficiary.
Example:
Assume an individual purchases publicly traded stock for $50,000.00. Assume that, over time, the stock appreciates in value to $1 million. If this individual taxpayer were to sell the stock, the taxpayer would have a $950,000.00 capital gain for income tax purposes, and would be subject to a substantial capital gains tax (this example will assume a combined federal and state capital gains tax rate of 20%, or $190,000.00 of capital gains tax). One tax planning idea would be for this individual to contribute the stock to a CRUT prior to the sale of the stock. The CRUT would then sell the stock. Assuming no other activity in the CRUT account, the $190,000.00 capital gains tax on the $950,000.00 gain would be paid over the lifetime of the taxpayer (without the CRUT, the taxpayer would have to pay the $190,000.00 all at once). The taxpayer would receive an annuity from the CRUT based on the full $1 million of sales proceeds, rather than an annuity (or income stream) based on the $810,000.00 after-tax proceeds. Source: https://en.wikipedia.org/wiki/Charitable_remainder_unitrust
A Charitable remainder Trust A charitable remainder trust (CRT) is an irrevocable trust that generates a potential income stream for you, as the donor to the CRT, or other beneficiaries, with the remainder of the donated assets going to your favorite charity or charities.
Example:
A Charitable Remainder Trust (CRT) is a gift of cash or other property to an irrevocable trust. The donor receives an income stream from the trust for a term of years or for life and the named charity receives the remaining trust assets at the end of the trust term. The donor receives an immediate income tax charitable deduction when the CRT is funded based on the present value of the assets that will eventually go to the named charity.
A Charitable Remainder Annuity Trust (CRAT) is a Planned Giving vehicle that entails a donor placing a major gift of cash or property into a trust. The trust then pays a fixed amount of income each year to the donor or the donor's specified beneficiary. When the donor dies, the remainder of the trust is transferred to the charity.
Example:
A Charitable Remainder Annuity Trust (CRAT) is a type of gift transaction in which a donor contributes assets to a charitable trust which subsequently pays a fixed income to a designated beneficiary, which can be a non-profit entity, a university, or another such party. Beneficiaries receive a fixed income from the CRAT in the form of an annuity, which is typically calculated as a fixed percentage of the initial value of trust assets. The minimum annuity distribution value is 5%. CRATs last until the donor passes away, at which time any funds that remain in the trust are then donated to a charity pre-chosen.
A living trust is a legal document, or trust, created during an individual's lifetime (the trustor or grantor) where a designated person, the trustee, is given responsibility for managing that individual's assets for the benefit of the eventual beneficiary. A living trust is designed to allow for the easy transfer of the trust creator or settlor's assets while bypassing the often complex and expensive legal process of probate.
Example:
How Living Trusts Work Living trusts are managed by a trustee who typically has a fiduciary duty to manage the trust prudently in the best interests of the trust's beneficiary or beneficiaries designated by the trust settlor, also called a grantor. Upon the death of the settlor, these assets flow to the beneficiaries according to the grantor's wishes as outlined in the trust agreement. Unlike a will, however, a living trust is in effect while the settlor is alive and the trust does not have to clear the courts to reach its intended beneficiaries when the settlor dies or becomes incapacitated.
Click here to download Estate Planning Agreement Page 1
Click here to download Estate Planning Agreement Page 2
Click here to download Estate Planning Agreement Page 3
Click here to download the Clients Trust Questionnaire
Click here to download Referral Fee Agreement here.Referral-Fee-Agreement
Our team is experienced in creating tax exempt charitable remainder trusts that allow you to create investment income that is exempt from taxation. Our estate planners work with your assets to meet your estate planning goals. Our estate planning team has decades of experience in the estate planning and asset protection fields.
Brian Sheridan has worked in the asset protection and estate planning business for decades. Visit Mr. Sheridan's profile at https://www.linkedin.com/in/brian-matthew-sheridan-01ba71122/
Mark Lee has worked in the finance and marketing field for decades. Visit Mr. Lee's profile at https://www.linkedin.com/in/mark-lee-130313162?original_referer=https%3A%2F%2Fwww.google.com%2F
Please contact us if you cannot find an answer to your question.
It is very crucial to understand that in estate planning that you devise a real plan that is both safe and realistic to your investment goals.
A financial plan needs to cover the following areas:
Protection from Inflation
Capital preservation
Tax Deduction
Protection from market risk
Protection for your family
Protecting purchasing power of the asset
Effective Asset Management
The annual inflation rate in the United States is 6.5% One of the many benefits of a charitable remainder unitrust is that it can hedge against inflation and can help you sell highly valued assets inside the trust thus deferring capital gains taxes.
Sign up to hear from us.
Contact Brian Matthew Sheridan or Mark Lee at Phone number: 1-(800) 604-1657 with any questions or email Mr. Sheridan at Info@Brianstrategictrustconsultants.com, and Mr. Lee at mark@strategictrustconsultants.com.
We can schedule a conference call at your convenience simply set a date and time and dial into 1-(848) 220-3300. Then enter the log in code 427-0199#.
Monday - Friday: 9am - 5pm
Saturday - Sunday: By appointment
A living trust is a legal document, or trust, created during an individual's lifetime (the trustor or grantor) where a designated person, the trustee, is given responsibility for managing that individual's assets for the benefit of the eventual beneficiary. A living trust is designed to allow for the easy transfer of the trust creator or settlor's assets while bypassing the often complex and expensive legal process of probate.
A Charitable Remainder Trust (CRT) is a gift of cash or other property to an irrevocable trust. The donor receives an income stream from the trust for a term of years or for life and the named charity receives the remaining trust assets at the end of the trust term. The donor receives an immediate income tax charitable deduction when the CRT is funded based on the present value of the assets that will eventually go to the named charity.
A Charitable Remainder Annuity Trust (CRAT) is a type of gift transaction in which a donor contributes assets to a charitable trust which subsequently pays a fixed income to a designated beneficiary, in the form of an annuity. The value of the annuity is calculated as a fixed percentage of the initial value of trust's assets, but that amount must be no less than 5%. A CRAT lasts until the donor passes away, at which time any funds remaining in the trust are then donated to a charity.
The most popular and flexible type of life income plan is a charitable remainder unitrust (CRUT). Cash, securities, real property, or other assets are transferred into the trust. The trustee manages the trust assets and pays you or others you choose a variable income for life or for a term of years. When the trust terminates, the remaining assets in the trust are transferred to the Church or one of its institutions.
We are fully bonded and insured up to $7,500.00 USD, and insured up to $5,000.00 USD with Error and Omissions coverage. We are a proud member of the American Association of Notaries. We are reliable and Professional Mobile Notary agent.
Copyright © 2023 Strategic Trust Consultants LLC - All Rights Reserved.
Powered by GoDaddy
We use cookies to analyze website traffic and optimize your website experience. By accepting our use of cookies, your data will be aggregated with all other user data.