You don’t have to be a real estate mogul or high-flying property investor to take advantage of a little-known yet highly effective tool for reducing property tax liabilities while supporting your favorite charity.
Within the world of real estate planning, there exists a powerful yet often overlooked tool: Charitable Remainder Trusts (CRT). While a third of us will inherit some form of property during our lives, surprisingly, many individuals who inherit property remain unaware of CRTs and the substantial tax benefits they offer.
So, what exactly is a CRT?
A CRT is an irrevocable trust that allows you to donate assets to charity while simultaneously drawing annual income for life or a specific period.
How does it work?
- You transfer appreciated real estate, cash, or other assets into the trust.
- The trust pays income to at least one living beneficiary (usually you or your loved ones).
- After the income term (the beneficiaries’ lifetimes or a term of years), the remaining trust assets pass to qualified charitable organization.
Why Consider a Charitable Remainder Trust?
Tax Efficiency: CRTs offer various tax benefits:
- Estate Tax Reduction: Assets placed in a CRT, potentially lower estate tax.
- Avoid Capital Gains Tax: By converting appreciated property into cash through a CRT, you can avoid immediate capital gains taxes.
- Income Tax Deduction: You receive an immediate income tax deduction based on the charitable contribution’s present value, even though the charity receives it later.
- Predictable Income: CRTs provide a steady income stream for life or a specified duration, ensuring financial stability.
- Philanthropic Impact: By supporting your favorite charity, you leave a lasting legacy beyond financial considerations.
Can I Support Causes Close to My Heart?
Yes! Imagine creating a CRT that benefits both your family and a cherished cause. Whether it’s supporting the land and people of Israel through Jewish National Fund, or other causes close to your heart, your philanthropic vision can thrive through a CRT.
CRTs are not just a tax strategy. They’re also a bridge between financial prosperity and meaningful impact. Turn appreciated assets into income, reduce taxes, and leave a lasting legacy for Israel, the Jewish people, and the world. Contact Jewish National Fund today at 800.562.7526, plannedgiving@jnf.org, or visit jnflegacy.org to discover how a Charitable Remainder Trust can benefit you and the causes you love.
This should not be considered legal, accounting, or other professional advice. Your actual benefits may vary depending on several factors.