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CRUT/CRAT

What is a CRT?

A Charitable Remainder Trust is a type of Irrevocable Trust that benefits a current beneficiary at the beginning, but at the end of its term, the “remainder” amount passes to charity.

Types of CRT

To satisfy the rules set up by Congress, a CRT may take the form of a Charitable Remainder Annuity Trust (CRAT) or a Charitable Remainder UniTrust (CRUT).

Charitable Remainder Annuity Trust (CRAT)

In a CRAT, the Grantor donates assets to the CRAT. The CRAT terms require that the Trustee pays to the beneficiary a fixed percentage of the donated asset. This takes the form of an “annuity.” The beneficiary receives a fixed amount over the trust term. At the end of the trust term, the “remainder” passes to charity.

Charitable Remainder UniTrust (CRUT)

In a CRUT, the Grantor donates assets to the CRUT. The CRUT terms require that the trustee pays to the beneficiary a set percentage of the trust assets valued each year. So, rather than receiving a fixed amount as in the CRAT, the beneficiary can receive more or less money each year.

Typical Estate Questions About CRTs:

Here are some questions clients, beneficiaries, and Trustees ask:

Do I have to put certain types of assets in the charitable remainder annuity trust?

No, but in general the tax benefits are maximized by placing low tax basis assets in the trust.

Can I put cash in the charitable remainder annuity trust?

Yes, but low-basis property usually results in a better tax result.

Can I have personal property pass to the charitable remainder annuity trust?

Yes, but these assets might be sold, so the reason for placing this property into a CRT need be well thought out.

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If you have any questions about Charitable Remainder Annuity Trusts or any other estate planning topics, please contact us to schedule a free consultation. For more than two decades Klenk Law has focused only on Estate Law. We’ve seen it all, and this experience allows us to explain complex estate law and planning techniques clearly and concisely. We make it easy for you to understand CRATs or CRUTs so you can make the best decisions for yourself and your family.

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Peter explained a complex subject very clearly, helped us to decide the best approach to managing our estate and then made it very easy for us to execute the required documents. He will be a valuable resource for years to come and clearly has a great understanding of estate law that will lead to innovative solutions for us. I would unhesitatingly recommend him for estate planning.

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Peter has done our family's trust and estate work since our children were born. He is not only extremely knowledgeable and honest, but makes sure that our arrangements remain current with the changing legal landscape. I would give him my highest recommendation as a professional in his field.

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Peter Klenk ESQ is a thoughtful and capable attorney who we work with on estate planning issues. His firm recently provided us with new Wills, Power of Attorneys and our instructions regarding major health issues. These documents are important for estate and life planning. Peter and his team are masters in the complexities of Estate Law. We highly recommend Peter and his Associates to provide thoughtful advice and outstanding work on these complex issues of the law. Make sure your estate planning documents are up to date, and Peter can be relied on to do an excellent job. Well done Peter!

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Klenk Law is an exceptional practice. Their fine lawyers and staff team up to produce excellent results for their clients. They excel at explaining the often cryptic laws and policies that govern estate planning right down to the complexities of the various "trust" frameworks. Peter himself manages each client together with his great team, and he has a rare quality to be both a walking encyclopedia of planning minutia and also one of the most likable lawyers I have ever had the pleasure of dealing with. He is truly generous in intellect and in his personal approach to getting the "big picture" for complex family structures. I trust him implicitly to help me make the right choices for the future. In short, Klenk Law is a gem of a firm.

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