Benefits of Establishing a Charitable Remainder Trust

A charitable remainder trust is a tool that is used by many individuals to help charities and help themselves at the same time. Here are the basics of establishing a charitable remainder trust and some of the benefits of using one.

Charitable Remainder Trust

With a charitable remainder trust, an individual donates money or property to a charity. Instead of conveying full ownership and use of the property to the charity, the individual still gets to use it in some way. For example, if she donated a piece of land, she could still continue using the land. If she donated money, she could still receive income from investments for a certain amount of time.

Benefits

One of the major benefits of using this strategy is that you can get a nice tax deduction at the end of the year. According to the IRS, this is still a contribution to a charitable organization, even though you are still utilizing the asset.

The strategy is potentially beneficial to those who have considerably valuable assets that they would like to donate. You can donate the assets, get your tax deduction and still bring in a nice income for yourself. This allows you a lot of flexibility as well as some stability in your financial situation.

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