Charitable Remainder Trusts

Charitable Remainder Trusts in Arizona and New Mexico

Trusts Related to Charitable Giving

Charitable giving in an estate plan does not just involve leaving money to a charity upon death. At every stage in life, everyone can take advantage of the tax benefits of charitable contributions while supporting the social causes that are most important to them by setting up Charitable Remainder Trusts.

Morris Hall, PLLC, can help you review your financial situation and determine the best way to meet your charitable giving wishes. We make it possible for you to benefit fully from the tax advantages and other protections afforded by charitable planning, including remainder trusts, charitable lead trusts and family foundations. If such charitable entities are properly created, you get the extra benefit of protecting your assets from creditors, tax judgments, divorce settlements and the required spend-down for long-term care.

Determine the Best Options for Your Situation

If you are an individual or family of high net worth, it can be very valuable to establish an advantageous manner to support a 501(c)(3) nonprofit or faith-based organization. There is no one-size-fits-all solution in a comprehensive advanced estate plan. The attorneys at Morris Hall work closely with Morris Hall accountants and Morris Hall financial planners to determine whether including a charitable planning device is an advantageous choice to meet your long-term planning needs. By looking at your complete tax situation, family circumstances and funding options, our experienced estate planning team can help you fulfill your charitable giving desires at every stage of life and income level.

Types of Charitable Trusts

We have extensive experience in all areas of trusts relating to charitable giving, including:

Charitable lead trusts: These reduce taxable income by distributing a portion of the trust’s income to charities. After a specified period of time, the remainder of the assets goes to your beneficiaries tax-free.

Charitable remainder unitrusts (CRUT): While the trust creator is alive, a CRUT distributes a fixed percentage of the value of its assets to the trust creator or to a noncharitable beneficiary. After death or a preset period of time, the remaining CRUT assets are distributed to charity.

Charitable remainder annuity trust (CRAT): Cash, securities, real property or other assets are transferred into a trust that pays the trust holder income at a set percentage for life or a preset number of years. Upon termination of the trust, the remaining assets are distributed to the charity.

Contact Our New Mexico and Arizona Estate Planning Attorneys

Contact us to arrange a consultation with an experienced trusts attorney today. Our offices are located in Phoenix, Tucson, Albuquerque and communities throughout Arizona and New Mexico.

The government encourages people to make gifts to recognized charitable groups or organizations. This is a win-win situation because the recipient benefits from the charitable donation and the donor benefits from the satisfaction of helping those in need. In addition to helping others, those who make a gift of appreciated property, real or personal, may also gain a financial advantage by benefitting a charity. A Charitable Remainder Trust (CRT) is provides a way to make a gift of appreciated property and avoid paying any capital gains taxes on the gift, in addition to receiving a tax write-off.

A CRT allows you to take appreciated property and convert it into an income stream for the rest of your lifetime. Converting property in this manner means that you avoid paying taxes on the appreciation. Further, the property is removed from your estate, entitling you to an immediate tax write-off equal to the present value of the gift.

A CRT is generally set up to provide an income stream that ends upon the trustor’s death. There are two basic ways to structure the income stream: (1) as a percentage of the value of the asset in the trust, or (2) as a fixed cash amount. Upon the trustor’s death, the remainder of the trust is distributed for the benefit of the charity. There are, of course, different considerations to be made for each option, and it’s important to remember that a CRT is irrevocable once established and funded, meaning you cannot change your mind later.

I’ve given a very brief overview of the function of this type of trust. If you have an appreciated asset and a desire to benefit a charity, make an appointment to speak to one of the attorneys at Morris Hall to discuss the options.

Contributed by MH Phoenix Estate Planning Attorney, Andrea Claus.

Why Choose Morris Hall:
You have a number of options when it comes to estate planning, so why pick Morris Hall? First off, estate planning and asset protection are a very complicated endeavor and you should only trust someone who focuses exclusively on those matters. Also, MH is a proud member of The American Academy of Estate Planning Attorneys (AAEPA) which provides us additional support, advanced training, tools and information that is not available to others – which means that we can better protect your assets and your loved ones. We are one of only two firms in Arizona that belong to the AAEPA and are the only firm in New Mexico that has been granted membership. If you have assets and loved ones that you want to protect, you are in good hands with MH. Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.

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