Many individuals want to use their financial standing to support causes and organizations they care about most.
It is important to practice smart philanthropy by using certain techniques to make a large impact than you think otherwise while concurrently enhancing your own financial resilience.
In our newsletter, The Power of Charitable Remainder Trusts, we will examine one method that many philanthropists use: charitable remainder trusts (CRTs).
The Essentials of a CRT
Let’s begin with the basics and benefits of CRT:
Income Stream. “You place appreciated assets in a CRT, which then provides an annual income stream. You can designate yourself or other people to receive that income. The income stream can last for your life or the lives of the people you designated. You can also have the income stream last for a term of years (within limits).”
Our newsletter has more benefits and basic information you need to know about CRTs, an important wealth management strategy for planning future giving.
Types of Charitable Remainder Trusts
There are two types of CRTs, charitable remainder annuity trusts (CRAT) and charitable remainder unitrusts (CRUT). With a CRAT, you or your assigned recipient receive a fixed monetary amount from the trust annually. Once you set the amount, it cannot be altered. With a CRUT, you (or your assigned recipient) receive a portion of the current value of the assets in the CRUT.
We dive deeper into the differences between CRAT and CRUT as well as provide case studies of CRTs for real life examples in our newsletter.
- The Right Intention is Crucial – “If you use a CRT, you must have a genuine charitable intent. The reason: A CRT is an irrevocable trust – once you put assets in a CRT, you cannot get them back.”
Read the full newsletter to learn of another possible warning to ensure going with a CRT is right for you.the-power-of-charitable-remainder-trusts
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Financial Harvest Wealth Advisors Team
The Financial Harvest Wealth Advisory team is dedicated to helping address the unique financial planning needs of each family, business, or individual that we have the privilege to serve. Our team members are focused on client success and helping our clients realize their most significant and meaningful life goals.