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2023 EP0311 | Financial Updates | Leave Money to your Heirs while Helping Your Favorite Charity

Planning Matters Radio / Peter Richon
The Truth Network Radio
March 11, 2023 10:00 am

2023 EP0311 | Financial Updates | Leave Money to your Heirs while Helping Your Favorite Charity

Planning Matters Radio / Peter Richon

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March 11, 2023 10:00 am

There are 4 unique reasons Charitable Remainder Trusts are good options for your Estate Plan. In this video, Peter Richon with Richon Planning and Erin Kennedy explain how a #crt works: it is an irrevocable trust that allows you—or a designated beneficiary—to receive an income stream for life. After you die, the remainder of the assets in the trust are donated to your charity (or charities) of choice. Peter also walks through those 4 benefits, including:

  1. You Can Save on Taxes
  2. 2. You Can Increase Your Income
  3. 3. You Can Support Worthy Causes
  4. 4. You Can Protect Your Money from Creditors 

Naming the trustee should be a thoughtful decision since a CRT is an irrevocable trust. If you'd like to learn whether a CRT makes sense for you or your family, please feel free to reach out to Peter by calling (919) 800-5886 or by making an appointment at


We want you to plan for success. Welcome to Planning Matters Radio.

Peter, it's good to see you. I really like today's topic. It's about leaving money to your heirs while helping your favorite charity. So today we're talking about charitable remainder trust and they allow you or a beneficiary to receive an income stream for life. And after you die, the remainder of your assets will go to your charity of choice.

So what are the benefits of a CRT as they're known? Well, I think that gifting is not only worthy and to to be honored and respected that that somebody has the heart and the will to do that, but can receive benefits. And some of them are what the charity would receive, obviously. But there are some that are for ourselves as well as in addition to the fact that I think a lot of people when they are giving tend to be more careful with the rest of their money and oftentimes seem to do a little bit better. A charitable remainder trust is one of the more advanced strategies that's probably later in life, right? We do some gifting, we do some tithing, we do some charitable donations along the way. We do them during our lifetime. We look for things to do with them. And a charitable remainder trust is one of the best opportunities to benefit that organization, that church, that charity, that university, the 501c3, but also get some some additional ancillary benefits along the way.

Right. So let's walk through them for reasons that CRTs are an attractive option for your estate plan. And first on your list, Peter, tax savings, right, you get to save on taxes. And this can potentially be one of the biggest opportunities to save on taxes with a sizable lump sum because you get the benefit of the deduction for the amount that you place inside of the charitable remainder trust, which as the name implies, after you're gone, the remainder will go to the charity, but you get the benefit of that gift of that donation now. And you can create some income along the way that can be routed to your estate plan. You can route that to yourself or to children or grandchildren, or you can route that income to the charity. And you also get to remove those assets from your estate.

So whether you are already in a place where your asset level has you concerned about estate taxes, or you're thinking about removing those assets over your lifetime, or the estate tax levels that could potentially and will likely drop into the future may place you into a position where you are dealing with estate taxes. It's a great opportunity and strategy to to remove assets from that potential. And this one I feel like kind of goes without saying, but obviously, you're helping your favorite cause, right? Yeah, it's it's a gift. It's a donation to your favorite cause.

You want to find one that is worthy of that kind of gift. But a lot of people gift to churches, a lot of people gift to colleges, a lot of people find a favorite nonprofit, and they obviously do receive the benefit. Again, you can set it up so that it will be set up so that they receive the remainder, but you can also set up so they receive some income along the way. And by the way, you receive the benefits of of that gift now.

Right. And then the fourth reason here that this is kind of a great planning option, protection against creditors. Yeah, and I think this is is kind of an ancillary benefit that people don't really do this because of, but it is a benefit that is a result from it is that that gift is is a gift now that removes those dollars from your estate. So if there is the potential for judgments or claims or litigations or creditors, those assets aren't considered because they're essentially no longer yours. They are outside of your estate. They are behind the firewall of the trust.

Now that does have kind of a dual edge, a benefit and a disadvantage. Again, those assets are now outside of of your possession. They are controlled by the trust, the terms of the trust that is put together and structured. So there is some lack of accessibility and flexibility down the road that you obviously need to think through very carefully when when considering or setting up any kind of gift, including a charitable remainder trust. Which is one reason why naming that trustee should be a very thoughtful decision.

Yeah, absolutely. You've got to choose carefully, but the executor, the trustee and the beneficiary, by the way, now there is some flexibility and improved interest rates over the past year or so Aaron can potentially improve the cash flow that can be generated. So if you already had one of these set up, you may want to revisit that and take a look, because we can now get a higher cash flow and a protect the principal and live off of the interest kind of approach is really the thought process behind the charitable remainder trust. So that that original gift the deposit in is intact and in full donated to the charity or the organization, but the income along the way, we are seeing that you could potentially increase that a little bit. So whether you're doing these gifts inside of a charitable remainder trust or without the associated tax benefits, just setting up a protect the principal and live off the interest kind of stream of income for yourself. A spend and leave plan, if you will. Those improved rates are significant in what we can generate for the income during our lifetimes and definitely worth double checking and reviewing if that is a goal.

Yeah, sounds like it. A really interesting strategy that helps you and your charity. I'm grateful we had the opportunity to talk it through. Peter, if somebody has questions about whether this is right for them, what's the best way to reach you? Give us a call at Rashaan Planning 919-300-5886, 919-300-5886, or you can visit online. Rich on Planning is what it looks like. It's my last name, Rashaan Planning. You can email me, Peter at Rashaan Planning dot com. All right, Peter, thank you.

Always a pleasure. This has been Planning Matters Radio. The content of this radio show is provided for informational purposes only and is not a solicitation or recommendation of any investment strategy. You are encouraged to take investment tax or legal advice from an independent professional advisor. Any investments and or investment strategies mentioned involve risk, including the possible loss of principal advisory services offered through Brooks own capital management, a registered investment advisor. Fiduciary duty extends solely to investment advisory advice and does not extend to other activities such as insurance or broker dealer services. Advisory clients are charged a quarterly fee for assets under management while insurance products pay a commission which may result in a conflict of interest regarding compensation.
Whisper: medium.en / 2023-03-11 12:27:43 / 2023-03-11 12:30:44 / 3

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