Did your finances change? So did your estate plan, whether or not you knew it.…
A Charitable Remainder Trust (CRT) is an irrevocable trust that allows a person to donate money to a charity while generating an income for either the donor or other beneficiaries with the remainder of the donated assets going to a charity or charities upon the death of the beneficiary(ies) or end of a stated term.
Charitable Remainder Trust as an IRA Beneficiary
One strategy for retirees is to name a CRT as an IRA beneficiary. In the trust, you could name a loved one as the income beneficiary of the CRT. This would allow that person to stretch the taxable distributions out for more than 10 years. At the death of the income beneficiary or at the end of the term of the trust, the balance of the money will pass to the charity(ies) named in the Charitable Remainder Trust.
Speak with an Estate Planning Attorney
This is a good strategy that allows a charity-minded person to donate money to a charity while also generating some income for a loved one. There are some challenges and pitfalls that are involved, so it is important to speak with an experienced estate planning attorney if you are considering this strategy.
Lastly, in our final installment of this series, we’ll take a look at ROTH IRA Conversions.