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

A charitable remainder trust (CRT) is a type of estate planning law that exists in Massachusetts. It is a type of trust that provides income to its beneficiaries for a certain period of time, and then transfers the rest of the trust’s assets to a designated charity. A CRT is a great way to give to charity while also providing for one’s family. A CRT can be established by an individual, or jointly by two or more individuals. Once the trust is established, the creators (grantors) can decide on a beneficiary or beneficiaries and the length of time the trust can last. During this time, the beneficiary(ies) will receive income from the trust, which can include investments, rental income, or other sources. At the end of the trust’s term, the remaining assets will be distributed to the designated charity (the remainderman). This is beneficial to the beneficiaries, as it means they will not have to pay taxes on the transferred assets. CRTs can be an effective way to provide for one’s family while also supporting a cause that the grantors care about. Furthermore, they are relatively easy to set up as long as the grantors are in compliance with the estate planning laws in Massachusetts.

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

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