By Sr. Laura Goedken
A Charitable Remainder Trust (CRT) is one of the most efficient estate planning tools available to anyone holding assets that have experienced significant appreciation such as stocks, real estate or a business. Setting up a CRT is a great way to provide income for your family, lower your taxes and give to worthy causes.
With a Charitable Remainder Trust an individual transfers cash, appreciated assets or other property to a trust. The trust sells the assets and reinvests the funds to produce income. The donor avoids capital gains tax. The trust makes regularly scheduled payments to the beneficiary. At a given time or the death of the beneficiary, the remaining assets go to a charity such as our Catholic Foundation, your parish or Catholic school.
For example, your home is valued at $500,000 and you purchased it years ago for $250,000. The trust sells the home, bypasses capital gains tax and invests the income. The beneficiary receives income for life and the remainder is transferred to a charity at death. This is a win-win for everyone. For more information, contact Sister Laura Goedken at Goedken@davenportdiocese.org or (563) 888-4252.