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CRAT - Charitable Remainder Annuity Trust
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What is a Charitable Remainder Annuity Trust

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What is a CRAT

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Okay, ladies and gentlemen, let’s look at some split-interest agreements you can use to pursue your philanthropic interests, earn some income and sidestep some tax expenses, too.
If you decide to give to donate to your favorite charities, you have to find suitable gift vehicles that allow you to claim tax deductions based on your effort. Charitable giving is an integral part of estate taxes and financial planning. Statistics show that about 3 in 10 taxpayers use charitable contributions to reduce their tax expenses.

Some of the fan-favorite gift vehicles include:

Charitable Remainder Annuity Trust

A charitable Remainder Annuity Trust, aka, a CRAT is an entity that pays a fixed income to designated beneficiaries during its lifetime, and later, it goes to designated charities. To put it simply, the trust lasts until the grantor dies, at which point the remaining funds are donated to a pre-chosen charity.

How is a CRAT created?

A CRAT is created with the help of a trustee, usually a financial advisor or a charitable remainder trust attorney, who helps develop the terms of the deal. Usually, the properties in the trust have to be sold, and the proceeds are put into investments suitable for producing wealth for donors. During the sale, care is taken to avoid tax expenses.

Payments to beneficiaries are in the form of an annuity, usually a fixed percentage of the assets’ original value in the trust. During the lifetime of the trust, the donor cannot make extra contributions.

Advantages of CRAT

CRATs guarantee beneficiaries a fixed income every year regardless of the performance of the underlying assets.
CRATs don’t incur liabilities since they are regarded as autonomous legal entities.
You can claim tax deductions from federal and state governments.
No capital gains tax on properties you give to the trust
You get to choose which charities get your wealth
Are you planning to use gift vehicles in your estate planning?
With an estate planning attorney’s help, you can set up charitable trusts and gifts of annuities.

Charitable giving is a fantastic estate planning tool; these gift vehicles allow you to donate to the charities of your choosing, reduce your tax burdens and receive dependable income for life.

Newport Beach Estate Attorneys Near Me

Hess Verdon is in Newport Beach. We have 30 years’ experience in estate planning law. We have helped many clients protect their estate, grow their estate, and pass it down to their loved ones through various legal instruments.

Our probate lawyers can help you administer or contest a will. We also have expertise in business law and elder abuse law. Expect personalized services that put you in control. Request a no-obligation case assessment

Advanced Estate Planning
Living Trusts | Irrevocable Trusts

What is an advanced estate plan?

It’s where your estate combines businesses, properties, intellectual property, blended families, and complex family matters. As a trustor/grantor, it’s crucial to have all your i’s dotted and t’s crossed in this litigious environment.  

Now, some people believe it’s ok to search for an “estate planning lawyer near me” and that drafting an estate plan is routine.  With the growth of trust and probate litigation, it’s obvious it’s not.  When it comes to advanced estate planning, a deep-court experienced attorney is always a great choice.  Hess-Verdon leads the way!

Our living trust lawyers use sophisticated estate planning and wealth preservation techniques to assist individuals, families, executives, and owners of closely-held businesses in preserving and protecting their assets and tailor plans to meet each client’s objectives.

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Charitable Remainder Annuity Trust - What Is A Crat

Trust Types

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