Retirement Saving and Charitable Remainder Trusts


By Clint Cauma CFP®, originally published in The Street's Retirement Daily

Leveraging a Charitable Remainder Trust may improve your financial plan. Use it to fine-tune the variables, including how much to give, how it changes your tax picture, how your cashflows are impacted, and how much is left to heirs.

Given the rise in asset prices both in stocks and real estate, the prospect of paying exorbitant taxes on capital gains is becoming an increasing concern. In addition, with legislation targeting to increase the taxes on these gains to pay for government spending, having a strategy to minimize and/or avoid these taxes is gaining popularity. For those who are charitably inclined, there are even more opportunities to combine different charitable strategies to satisfy both the desire to potentially reduce taxes and the desire to give to worthwhile charities. This is where using the Charitable Remainder Trust (CRT) can be helpful. 

This article will discuss the following:

  • Two types of CRTs
  • Tax benefits of CRTs
  • Income benefits of CRTs
  • Benefits of a Donor Advised Fund (DAF) as the remainder beneficiary

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