Charitable Planning
If you support a cause and also hold appreciated assets, the right structure can let charity, your family, and your tax position all benefit at the same time. A Charitable Remainder Trust, a Charitable Lead Trust, or both can coordinate giving, income, and inheritance.
What you should know
- A Charitable Remainder Trust (CRT) lets you transfer appreciated property to the trust, receive an income stream for life or a term of years, take a charitable income tax deduction, and have the remainder go to charity — generally without capital gains tax at the sale.
- A Charitable Lead Trust (CLT) reverses the order: charity receives income for a defined term, then the remainder passes to your family — often at a reduced gift tax cost, depending on the rate environment.
- The two main CRT types are the CRAT (fixed dollar payments) and the CRUT (fixed percentage of trust value, which can adjust over time).
- A CRT paired with an Irrevocable Life Insurance Trust (ILIT) can replace the charitable remainder to your family with a tax-free life insurance benefit — preserving family inheritance while still capturing the charitable structure’s benefits.
- Charitable structures are most effective with appreciated assets and a real charitable intent. They are not a tax-shelter shortcut — they are a way to do more of something you already want to do.
What it looks like for one family
The same appreciated asset can trigger a big tax bill or fund both income and a gift — the structure changes everything.
Sell it outright
Capital gains tax takes a bite
Bob and Peggy Caldwell own stock that has grown far beyond what they paid. If they sell it to reposition, they owe capital gains tax immediately — leaving less for both income and giving.
Fund a charitable remainder trust
Income now, a gift later, tax deferred
By contributing the stock to a CRT, the Caldwells take an income tax deduction, receive an income stream for life, defer the capital gains, and leave the remainder to a cause they care about.
Bob, Peggy, and the Caldwell family are a composite example used to show how the choice plays out — not a real client. Charitable structures fit real charitable intent, not a tax shortcut.
CRT or CLT — which fits your charitable plan?
Five short choices. Brent reads your answer back to you at the end.
A 30-second guided quiz. Get a personal read on whether a CRT or CLT fits your goals.