charitable remainder trust

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charitable remainder trust (Charitable Remainder Irrevocable Unitrust)

n. a form of trust in which the donor (trustor or settlor) places substantial funds or assets into an irrevocable trust (a trust in which the basic terms cannot be changed or the gift withdrawn) with an independent trustee, in which the assets are to go to charity on the death of the donor, but the donor (or specific beneficiaries) will receive regular profits from the trust during the donor's lifetime. The IRS will allow a large deduction in the year the funds or assets are donated to the trust, and the tax savings can be used to buy an insurance policy on the life of the donor which will pay his/her children the proceeds upon the donor's death. Thus, the donor (trustor) can make the gift to charity, make a return on his/her money and still arrange to make a large gift at death to his/her heirs. The disadvantage is that the assets are permanently tied up or committed.

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Transfers to donor-advised funds, supporting organizations, private foundations, charitable remainder trusts, charitable gift annuities, and pooled income funds are not qualified charitable distributions.
4 Common Questions About End-of-Year Charitable Giving Strategies
Trusts that aren't exempt from federal taxes, such as charitable remainder trusts, aren't subject to the Medicare surcharge either.
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Charitable remainder trusts also fall within this category.
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How are charitable remainder trusts used as planning tools?
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The Real Estate Power Program provides donors the opportunity to use charitable remainder trusts to donate their property to TERI.
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As noted above, in the case of charitable remainder trusts, the individual grantor and the charity are happy.
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Unlike charitable remainder trusts, charitable lead masts are not tax-exempt The primary benefit of a CLT lies in its potential gift-tax advantages.
How to smartly give away assets during your lifetime
Planning Point: While charitable remainder trusts and wealth replacement trusts are often presented as an integrated plan, it is important to note there is a proper order to funding these trusts.
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It explains how to use the IRS tax code's rules on depreciation, how to set up annuity trusts and charitable remainder trusts, how to avoid paying federal taxes, and how to understand the different types of 1031 exchanges.
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A split interest gift may be made in trust or property; however, charitable split interest trusts include many of the more popular methods of charitable giving such as charitable remainder trusts and charitable lead trusts (both discussed below).
Chapter 28: Charitable planning
The Pension Protection Act amended IRC [section] 6034 to allow the IRS to merge forms 5227 and 1041-A for charitable remainder trusts, charitable lead trusts and pooled income funds.
New split-interest return form
While outright gifts of S corporation stock to a qualified charity are deductible, transfers of S stock to charitable remainder trusts are generally not deductible.
Chapter 4: gifts of property

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