Written by David Wheeler Newman Since its introduction into the Internal Revenue Code in 1969, the charitable remainder trust has been the “Swiss Army Knife” for charitable gift, financial and estate planners because of its flexible features that allow a balancing of financial planning or estate planning objectives with philanthropic objectives. Those features include two CRT tax benefits provided in the Code – the charitable … Continue reading Administration Proposal Would Negatively Affect Tax Benefits of Charitable Remainder Trusts
Charitable Remainder Trusts and Charitable Lead Trusts: California Attorney General Registration Rules Written by Jeffrey Davine It is common knowledge in the nonprofit community that a charitable entity operating in California is required to register with the California Attorney General. The initial registration is accomplished by filing Form CT-1 with the California Attorney General and paying the registration fee. The Form CT-1 should be filed … Continue reading Do CRTs and CLTs Need To Be Registered With the CA Attorney General?
The Internal Revenue Service has issued important new guidance that can allow a charitable remainder annuity trust (CRAT) to qualify under Internal Revenue Code section 664 in a low-interest environment.
Section 664 confers substantial tax benefits on charitable remainder trusts that meet its requirements. These are irrevocable trusts that during their term distribute a formula amount to one or more non-charitable beneficiaries, with the remainder distributed to charity upon termination of the trusts. There are two allowable formulas. A charitable remainder unitrust (CRUT) distributes a fixed percentage of the value of trust assets determined every year. There are some allowable variations for CRUT distributions, but in general this means that distributions from a CRUT can go up or down from year to year, depending on increases or decreases in the value of trust assets. While CRUTs are by far the more popular of the two main varieties, some clients and donors prefer the CRAT, which distributes the same amount every year during its term, which is fixed at the time the trust is created and which must be at least 5% of the value of assets contributed to the trust. Continue reading “Important New Guidance on Charitable Remainder Annuity Trusts”