Charity doesnâ€™t always mean aone-way act of giving. Sometimes it is good to â€œgive and receive.â€ Depending on your assets, you might want toconsider creating a charitable shelter trust.
These trust are known by somerather silly acronyms, like CRUTs, CRATs, NICRUTs, NIMCRUTs, or Flip CRUTs.Nevertheless, the power behind this alphabet soup of sorts can cut your capitalgains taxes or fund a retirement while benefiting your favorite charity at theexpense of the IRS.
The world of the CRUT and allits brethren is familiar to some, but alien to many. If you are among those inneed of some background education on this timely subject, then a couple ofrecent articles from Forbes are worthreading.
The first is titled â€œCharitable Shelter: How CRUTs Cut CapitalGains Tax.â€ As this articlenotes, you can use a CRUT, or Charitable Remainder Unitrust, to cut yourcapital gains taxes by using the trust to sell highly appreciated assetswithout triggering any taxation, to provide you with an annual income stream,and then to leave the remainder to charity. With all increases in the capital gains tax considered, and otherspecific taxes besides, a CRUT can mean preserving more than 20-30% of thevalue of the asset of the top to benefit you and charity.
For some additional perspectiveon the use of charitable trusts consider reading a companion article of real storiesfrom Forbes titled â€œThree Donors Tell Why They Set Up CRUTs.â€
As you might imagine, choosingthe right charitable remainder trust depends a great deal on your assets, yourneeds, and the likely timespan before the charitable part comes into play. Aswith all estate planning, this is not a do-it-yourself project.
For more information on this and otherestate planning subjects, contact IdahoEstate Planning and schedule aconsultation. Remember,good planning is no accident.