What is a charitable remainder trust?

A charitable remainder trust (CRT) is a special type of trust used for estate planning purposes in California and other states. It is a trust created for the benefit of a charitable organization, and it allows the creator of the trust (also known as the trustor) to provide for their own financial security while also benefiting a charitable cause. The trustor places assets into the trust, and then selects a charity to be the beneficiary of the trust. The trustor can also designate a beneficiary to receive the trust income, known as an income beneficiary. The income beneficiary will receive income from the trust according to the trust’s terms and conditions. At the end of the trust term, the remaining trust assets will be distributed to the designated charity. This way, the trustor can benefit from the assets while they are alive, and the charity will receive the remainder of the assets after the trustor passes away. CRTs often provide more financial benefits to the trustor than other types of trusts. The trustor can receive a tax deduction for the trust assets, and they can also potentially avoid estate taxes. They can also opt to distribute income from the trust in a certain form, such as a lump-sum payment or periodic payments, depending on their individual needs. In sum, a charitable remainder trust is an estate planning tool that can provide financial benefits to the trustor, while also providing benefits to a charitable organization. It allows for an efficient way to distribute wealth in order to benefit both the trustor and the charitable beneficiary.

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What is a charitable remainder trust?

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