Flash Report - The Power of Charitable Remainder Trusts

Do well by doing good.

A growing number of individuals and families want to use some of their wealth to support the causes and organizations they care about most. From helping those less fortunate to facilitating scientific breakthroughs, from providing safe habitats for wildlife to sharing the arts, philanthropy is a core value for many.

Of course, it’s important to engage in smart philanthropy by using certain tools and strategies that can help you have a much bigger charitable impact than you otherwise could—while simultaneously enhancing your own financial flexibility.

In short, philanthropic planning can help you—as the old saying goes—“do well by doing good.”

With that in mind, here’s a closer look at one philanthropic tool that many charitably minded people and families use: charitable remainder trusts. CRTs can be extremely useful and powerful wealth planning tools that allow you to have a major impact on a charity you value while also providing benefits like lower taxes and a regular income stream.

The ABCs of a CRT

Let’s start with some CRT basics and benefits.

  • Income stream. You place money or 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).

  • Tax-deferred growth. The assets in the CRT grow tax-deferred. You are taxed only on the income you receive from the CRT.

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The Power of Charitable Remainder Trusts

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

 

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Eye On Money November/December 2019