What is a charitable remainder trust and how does it work?

A charitable remainder trust (CRT) is a type of estate planning tool used in Delaware. It’s used to provide an income stream to the trust’s beneficiary(s) over a certain period of time, while also providing a tax deduction for the donor(s). A CRT works by having the donor(s) transfer their assets (such as cash, stocks, bonds, or real estate) to the trust. The trust then distributes income to the beneficiary periodically (such as annually or quarterly). The income can come from a variety of sources, including dividends, capital gains, or interest. The trust also allows for principal to be distributed to the beneficiary, although this is not mandatory. The donor(s) benefit from the CRT in a few ways. First, they are typically eligible for a tax deduction based on the type of assets placed in the trust. Second, the donor(s) can continue to receive income from the trust during their lifetime. Additionally, the donor(s) can dictate how their assets are distributed after their death. At the end of the trust’s period, the remaining assets are distributed to a charity or other non-profit organization. This allows the donor(s) to make a lasting impact on their chosen cause, while also being able to receive income while they are alive.

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What is a charitable remainder trust and how does it work?

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