Charitable Remainder Trust

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A Charitable Remainder Trust (CRT) is a life-income arrangement that provides you and/or other beneficiaries with a stream of income for life or for a period of years. After the trust terminates, the principal, or “remainder interest,” goes to the ASPCA. Unlike other life-income arrangements, CRTs are separately invested and managed trusts. Please note that the ASPCA does not manage these trusts for donors.

This is the most flexible of life-income plans, and a powerful way for you to benefit along with your heirs and the ASPCA. Some versions of CRTs can be funded with closely held stock, partnership interests, real estate, and in some instances, tangible personal property such as works of art. You can choose to receive a variable or fixed income (beginning immediately) for life or a term of years. There is no limitation on the number of beneficiaries of a CRT.

CRT Benefits

When appreciated assets are donated to the trust, they can be sold without incurring capital gains tax, allowing the entire proceeds from the sale to be reinvested. You can receive a charitable income tax deduction in the year the gift is made, with an additional five years to carry over any unused deduction. You can add to certain types of CRTs at any time. Through reinvestment within the trust, you can achieve diversification of a previously concentrated asset. Any assets that you contribute to a CRT are immediately removed from your estate, reducing your estate tax exposure.

Basic Types of CRTs

Unitrust (CRUT)

This type of trust pays a variable income based on a fixed percentage (for example, between 5 and 6 percent) of the trust assets, revalued once each year. One advantage of a unitrust is that your income can increase as the trust principal grows over time. This type of CRT allows you to make additional contributions at any time.

Annuity Trust (CRAT)

This type of trust pays a fixed annual income that is determined when the trust is established. The annuity trust is often preferred by those who are interested in the security of a constant return. See how a Charitable Remainder Trust will benefit you with our gift calculator.

For more information, please contact the Gift Planning Office at (212) 876-7700, ext. 4505, or [email protected].

The material presented in this web site is intended as general educational information on the topics discussed herein and should not be interpreted as legal, financial or tax advice. Please seek the specific advice of your tax advisor, attorney, and/or financial planner to discuss the application of these topics to your individual situation.