Benefits of charitable remainder trusts

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Benefits Of Charitable Remainder Trusts

For people who are philanthropically minded and able to make sizeable donations to charitable organizations, combining their donor activities with their estate planning can be wise and beneficial to both their intended charities and to themselves. A charitable remainder trust may provide the right vehicle for people in these situations but understanding how this type of trust works is important.

As explained by Fidelity Investments, a charitable remainder trusts allows a person to put assets into a trust, receive an income from the trust and designate remaining funds to be distributed to one or more charitable organizations upon their death. The amount of money that a person can receive from a charitable remainder trust may vary based upon the specific type of CRT they create. Some trusts provide a fixed amount of money on an annual basis while others provide a fixed percentage of the trust’s value each year.

A charitable remainder trust is a form of an irrevocable trust, but it may be possible to add assets in some situations. It may also be possible to amend the charity or charities identified as recipients of assets at the end of the trust.

Schwabe Charitable adds that a donor may receive some tax benefits from a charitable remainder trust. The level of tax benefit may vary depending on whether the trust is funded with liquid or non-liquid assets. Additionally, some people may benefit from utilizing a charitable remainder trust along with a donor advised fund for maximum control over how and when assets are distributed to the charity beneficiary or beneficiaries.


Michael Ritigstein is a Founding Partner of the firm concentrating his efforts in supporting the firm's litigation, corporate and estate matters. Mr. Ritigstein graduated from the University of Delaware in 1996 and Seton Hall University School of Law in 2000. In 2007 he received a Masters of Law in Taxation with a concentration in Estate Planning, from Temple University's Beasley School of Law.

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