Charitable Remainder Trust

To establish a Charitable Remainder Trust (CRT), you contribute highly-appreciated assets to the CRT and name a charity or charities as the ultimate beneficiary. During your lifetime, or for a stated period of time, the trust pays income for your benefit. Upon your death, ownership of the principal is transferred to the charity without estate or gift tax.

A CRT reduces the tax burden on your estate and also provides a tax benefit during your lifetime. You can receive a current income tax deduction on the actuarial value of the CRT at the time you transfer assets to the trust. And that deduction may be carried forward up to five years.

Haverford works with you and your attorney to establish a CRT and navigate the various options. Once it is established, we can administer the trust and ensure that distributions are made and assets are distributed as you intend. In deciding whether or not a Charitable Remainder Trust is right for you, keep these facts in mind:

A CRT provides you or your beneficiary with income, shelters highly-appreciated assets from capital gains tax, and reduces the ultimate tax burden on your estate.

A CRT is irrevocable. Once it is established, you cannot change your mind.

Consider a CRT as part of your charitable giving. While you will enjoy the income of the trust during your life, you will be putting the principal beyond your use.

Common Types of Trusts and Their Uses

The Living Trust

Charitable Remainder Trust

Irrevocable Trust

Special Needs Trust

Wills/Estate Settlement

Ensures Investors’ Wishes Primary Primary Benefit Benefit Primary
Protects Minor Children Option No Option Option Option
Provides for Those with Special Needs Option No Option Primary Option
Ensures Smooth Transition of Wealth Primary Benefit Benefit Option Primary
Benefits Charities Option Primary Option No Option
Tax Advantages No Primary Option No Primary
Irrevocable No Yes Yes Yes Yes