According to an article in The Trust Advisor Blog, despite the estate tax hiatus, IRS records show steady creation of charitable remainder trusts, and experts expect a CRT boom ahead.   MORE »

Charitable remainder trusts and charitable lead trusts are often used independently to accomplish a broad variety of personal and philanthropic planning objectives. In this case study, we see how these trusts can be used in combination to provide substantial current annual gifts to charity, a large remainder gift that will fund an endowment, and a large tax-free gift to the donor's heirs.  MORE »

Most charitable remainder trusts are created with the intention of providing an income stream to the donors for their lifetimes with the remainder passing to charity at the conclusion of the trust term. In this case study, Mr. and Mrs.  Allen take advantage of a seldom used option that enables them to provide current annual gifts to charity as well.  MORE »

The U.S. Patent Office has published a patent application for a system and method for maximizing after-tax income from charitable remainder trusts. According to the application, "An evaluation service establishes a first charitable remainder trust (CRT-1) that generates ordinary income from fixed income investments and a second charitable remainder trust CRT-2 that generates growth income from equity investments."  MORE »

Writing on behalf of the American Council on Gift Annuities, Conrad Teitell has drafted a letter to the Treasury and the IRS to suggest solutions in response to Notice 2008-99 in which the IRS and Treasury announced their interest in a type of transaction involving the sale of interests in a charitable remainder trust that might result in inappropriate tax avoidance by the trust’s grantor.  MORE »

Writing on behalf of the Estate & Gift Taxation Committee of the Association of the Bar of the City of New York, Michael I. Frankel has pointed out inconsistencies in private letter rulings regarding the calculation of income interests for net income charitable remainder unitrusts that propose to terminate early. Some rulings indicate that "one" reasonable method of calculating the actuarial value of the income interest use the lower of the stated percentage distribution rate of the NIMCRUT or the Code § 7520 rate in effect for the month of termination while others use only the Code § 7520 rate in effect for the month of termination. The bar urges IRS to issue guidance that uses the same method that is used to value income interests when a NIMCRUT is created.  MORE »

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The Conrad N. Hilton Foundation has announced that its Chairman, Barron Hilton, is building on the philanthropic legacy of his father by contributing approximately $1.2 billion of proceeds from the sale of Hilton Hotels Corporation and the pending sale of Harrah's Entertainment into a charitable remainder unitrust that will eventually benefit the foundation. Barron Hilton further indicated he plans to ultimately donate 97% of his entire net worth to the foundation on a testamentary basis.  MORE »

According to IRS statistics, small businesses represent nearly one third of the value of affluent decedents' estates. CRT planning for small business owners is a critical capability for any gift planning shop. This advanced session will describe several CRT options that benefit the small business owner by increasing lifetime cash flow, increasing cash flow and business control to the next generation, increasing employee benefits, and increasing charitable gifts.

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In addition to the complex set of Federal income, gift, and estate tax rules that confront the creation, funding, and administration of charitable remainder trusts, a number of states have specific requirements. For example, New York assesses a transfer tax on the sale of real property, a CRT is not exempt from this transfer tax. Pennsylvania and New Jersey do not recognize a CRT as an exempt trust. California assesses a transfer tax on the sale of real property, but does exempt CRTs. And Illinois and Oregon require the registration of a CRT with the state Attorney General's office.  MORE »