Tax-Favored Lifetime Income
In conjunction with their
Family Foundation account, many people take
advantage of the
CRT Advantage™ Trust, a tax-exempt
income trust. The
CRT Advantage is very popular with individuals who have appreciated real estate
or appreciated stocks/mutual funds, or have low-income producing or
non-income producing real estate or stocks/mutual funds.
Many people
would like to increase their income from these assets but are reluctant
to sell them because they don't want to pay the capital gains tax. The
CRT Advantage makes it possible for the appreciated property to be sold without incurring capital gains tax at the time of sale. This allows 100% of the sale price of the asset to be
invested. Because you can invest a larger
principal (no tax reduction), more annual income
can be generated than by any other option.
The CRT
Advantage
trust then pays this annual income to the donors
(single or joint and survivor) or persons they
name as income beneficiaries for their
lifetimes. At death of the last survivor,
whatever is left in the trust will transfer
to the donor's family foundation. It's
almost like having your cake and eating it too.
In addition, when the
CRT Advantage is funded, the taxpayer receives an immediate
income tax deduction as well as an estate reduction which could
reduce or eliminate any estate tax.
Heirs can also
receive the replacement value of what goes into
the CRT Advantage
when they create a
Wealth Enhancement Trust™. This planning is optional, but when
properly done, it eliminates any objections to
the use of the CRT Advantage
trust plan. In many cases, tax
savings alone can pay to fully insure the value
of the CRT. The insurance proceeds
then go to heirs tax-free.
Creating new and
more effective philanthropy since 1982.
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