first: the government’s claims must be settled before the family receives what’s left. This is why preparation matters. Without an intentional estate plan, creditors and the government may receive more than your family. Charitable Gifting with a CRUT A client of mine once wanted to give a substantial sum to his small community church after his wife passed. Instead of gifting outright, I suggested establishing a Charitable Remainder Unitrust (CRUT). He named himself the income beneficiary for life and appointed trusted family members as successor trustees. The church received annual distributions, but if the church ever closed or experienced leadership issues, the trustees were instructed to redirect the funds to another quality church of the same denomination. This structure guaranteed accountability and honored his legacy, while also protecting the gift. Why a CRUT? A Charitable Remainder Unitrust can provide three key tax advantages for families: Income Tax Deduction — An immediate charitable deduction based on age, interest rates, and payout terms. Capital Gains Avoidance — Long-term appreciated assets can be transferred without triggering immediate capital gains tax. The trust can sell and reinvest freely. Estate Tax Reduction — At the death of the surviving spouse, the charitable remainder is excluded from the taxable estate. In addition, a CRUT can help diversify concentrated holdings (such as a large stock position or real estate) without incurring a tax hit, while also producing lifetime income for the grantors.
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