Charitable Remainder Annuity Trust
A charitable Remainder Annuity Trust, aka, a CRAT is an entity that pays a fixed income to designated beneficiaries during its lifetime, and later, it goes to support the Mission. To put it simply, the trust lasts for the life of the grantor, at which point the remaining funds are donated to support the Mission of San Juan Capistrano.
Advantages of a Charitable Remainder Trust
Are you planning to use a CRAT in your estate plan?
Charitable giving is a fantastic estate planning tool; these gift vehicles allow you to donate to the Mission, reduce your tax burdens and receive dependable income for life.
How is a Charitable Remainder Annuity Trust (CRAT) created?
A CRAT is created with the help of a trustee, usually a financial advisor or estate planning attorney, who helps develop the terms of the deal. Usually, the properties in the trust have to be sold, and the proceeds are put into investments suitable for producing wealth for donors. During the sale, care is taken to avoid tax expenses.
Payments to beneficiaries are in the form of an annuity, usually a fixed percentage of the assets’ original value in the trust. During the lifetime of the trust, the donor cannot make extra contributions.
Advantages of CRAT
- CRATs guarantee beneficiaries a fixed income every year regardless of the performance of the underlying assets.
- CRATs don’t incur liabilities since they are regarded as autonomous legal entities.
- You can claim tax deductions from federal and state governments.
- No capital gains tax on properties you give to the trust
- You get to choose the Mission, for example, to get your wealth.