Description

Gain an understanding of how to implement charitable remainder trusts for your clients.Second, only to the charitable gift annuity, the charitable remainder trust (CRT) is the most commonly used vehicle for what is called ‘planned’ charitable giving. In its present form, the CRT has its origins in the Tax Reform Act of 1969. Both the 1969 legislation and further revisions in 1997 were intended to curb certain abuses, which we will discuss. Properly structured, the CRT can allow the trust settlor to defer recognition of capital gain over twenty or more years while affording a significant charitable income tax deduction at the front end. The device can also be useful in prenuptial and divorce planning.We will look at the basic structure of the CRT, frequently encountered issues in drafting and trust administration, and some planning opportunities. We will examine in some detail the differences between the annuity trust (CRAT) and the unitrust (CRUT), and among the various subspecies of unitrust arising from the choice to impose a net income limitation on the payout, with or without makeup, and with or without a mechanism to flip the net income trust to a straight unitrust payout.You will be able to identify situations in which a CRT is or is not an appropriate planning vehicle, explain how to structure the trust to meet the client’s planning objectives, and recognize situations in which an existing trust might require a judicial or nonjudicial reformation, or in which the income beneficiary might want to accelerate the remainder.

Date: 2023-06-21 Start Time: End Time:

Learning Objectives