Charitable Remainder Unitrust (CRUT) - School Me Please

zghorner · Sep 29, 2018

Not sure which forum to put this at...

My father in law has a CRUT that he is wanting to set up with a brokerage account. After talking to him about it for a while I was thinking "why the hell don't I have one of these". No capital gains tax and you are able to write off contributions. I believe he can withdraw 10% annually which to me isn't that bad of a deal. Another draw back is once the beneficiaries are dead the principle goes to a selected charity but from what I understand there are ways "around that" also. So anyone with experience in this area please offer up your opinion. Thanks.

lindq · Sep 30, 2018

zghorner said:
Not sure which forum to put this at...

My father in law has a CRUT that he is wanting to set up with a brokerage account. After talking to him about it for a while I was thinking "why the hell don't I have one of these". No capital gains tax and you are able to write off contributions. I believe he can withdraw 10% annually which to me isn't that bad of a deal. Another draw back is once the beneficiaries are dead the principle goes to a selected charity but from what I understand there are ways "around that" also. So anyone with experience in this area please offer up your opinion. Thanks.

The purpose of a charitable trust is to encourage contributions. Its a great program and has really benefited a lot of worthy organizations.

But it isn't designed to serve as a tax haven or a method of transferring remainder funds to family members at the time of death.

zghorner · Oct 1, 2018

lindq said:
The purpose of a charitable trust is to encourage contributions. Its a great program and has really benefited a lot of worthy organizations.

But it isn't designed to serve as a tax haven or a method of transferring remainder funds to family members at the time of death.

I understand what you are saying. I have been doing some research and I think a CRUT really only becomes "a tax haven" if someone is about to experience some serious capital gains tax. Also I didn't realize the distributions to the beneficiaries was considered taxable income.