Charitable Remainder Trust

The Charitable Remainder Trust Foundation (CRTF) can reduce estate taxes and defer income taxes beyond the normal IRS deferral rules by including "income in respect of decedent" (IRD) at death. IRDs are assets that would have been taxed by the IRS as income, if the recipient had lived long enough to receive them. The income may be from IRAs, other qualified retirement plans, partnership interests, accrued interest on Certificates of Deposit and savings bonds, non-qualified stock options, deferred payments of capital gains, various contract rights, and other undistributed but earned income.

CRTFs also can generate greater income (cash flow), which is retained for the life of one or more individuals, or for a term not to exceed 20 years. Typically, the income is 6-15 percent of the transferred asset's value, determined on an annual basis.

The CRTF offers flexibility in its structure. It may provide a large income tax deduction at the time of its creation, while deferring actual income until later years - or establish immediate income for senior family members. It can be extended over multiple generations, often providing greater income to both senior and junior family members. A CRTF may be created before or at death.

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