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Charitable Remainder Trusts: Utilizing CRATs and CRUTs to Minimize Income and Transfer Tax, SECURE 2.0 QCDs

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Thursday, July 6, 2023

Recorded event now available

or call 1-800-926-7926

This webinar will take a comprehensive look at charitable remainder trusts (CRTs) as a means to reduce estate and income taxes paid by taxpayers. Our notable panel will explain which taxpayers are ideal candidates for CRTs, the calculation of the remainder interest and annual pay-outs, differences in CRATs and CRUTS, and the new SECURE 2.0 provision allowing a one-time transfer to a CRAT.

Description

CRTs have been a long-standing way to simultaneously minimize estate taxes, defer income taxes, provide an annual income stream, and be philanthropic while gaining a charitable income tax deduction. Appreciated assets and company stock are ideal assets to contribute to these trusts. The trust sells the assets allowing the donee to avoid tax on the current-year gain and beneficiaries to postpone recognizing the gain until distributions are made.

As if the historical benefits weren't enough, current rising interest rates increase the IRC Section 7520 rate and the value of the charitable deduction. Additionally, the new provision in SECURE 2.0 allows up to a $50,000 qualified charitable distribution to a charitable remainder annuity trust.

Along with the benefits are caveats. These trusts are irrevocable and can be complex to administer. Using CRATs to eliminate capital gains made the IRS' dirty dozen list of tax scams in 2022. Trust and estate advisers utilizing CRTs need to understand how to avoid missteps and maximize the benefit of these trusts.

Listen as our panel of trust and estate planning experts points out the benefits and caveats of using CRTs to minimize estate and income taxes.

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Outline

  1. Charitable remainder trusts: introduction
  2. Benefits
  3. SECURE 2.0
  4. CRATs
  5. CRUTs
  6. Calculations
  7. Caveats
  8. Best practices

Benefits

The panel will cover these and other critical issues:

  • Preparing for IRS scrutiny of CRTs
  • Calculating the remainder interest for contributions to a CRT
  • Utilizing SECURE 2.0 one-time qualified charitable distribution to a CRAT
  • Differences between CRATs and CRUTs
  • Clients who could benefit most from CRTs

Faculty

Gabbard, Renee
Renee M. Gabbard
Partner
Procopio, Cory, Hargreaves & Savitch

Ms. Gabbard’s practice focuses on privately held businesses, high net worth clients, and charitable...  |  Read More

McNary, James
James T. McNary
Attorney
McNary Law Office

Mr. McNary has been practicing law for more than 30 years. Throughout most of his career he has limited his practice to...  |  Read More

Stanley, Douglas
Douglas J. (Doug) Stanley
Partner
Bryan Cave Leighton Paisner

Mr. Stanley counsels and advises clients, including high net-worth individuals, professionals and entrepreneurs, on a...  |  Read More

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