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Dianne Williams Wildt, MBA

Certified Retirement Counselor®

Since 1983 in the financial services and investment industry


Retirement Pathways, Inc.

4500 Bowling Blvd., Suite 100

Louisville, KY 40207


Phone:  502-797-1258


Email: dianne@retirementpathways.com

Website: www.retirementpathways.com

September/October 2023

The Nuts and Bolts of a Charitable Remainder Trust

The Nuts and Bolts of a Charitable Remainder Trust

High net worth families often want to give to charity, while ensuring that loved ones - especially a surviving spouse - are taken care of financially. A charitable remainder trust can help accomplish these dual goals.

Know the Difference
A charitable remainder trust makes payments to beneficiaries, such as you or family members, until the term ends, when the remaining assets are distributed to the charity you have named in the trust. This can happen at a date established in the trust or at the death of a person or persons named in the trust.

This type of trust differs from a charitable lead trust, which flips how payments are made to individuals and a charity. The charitable lead trust makes recurring payments to the charity, and at the end of the term you’ve established in the charitable lead trust all remaining assets go to the noncharitable beneficiary named in the trust. Because both types of trusts are irrevocable, which make them very difficult to change, you should consult the appropriate legal, tax and financial professionals before proceeding.

Why Create This Trust?
Any charitable trust is a vehicle that can efficiently transfer assets to a charity or charities at a time noted in the trust document, while offering an income stream for a fixed term or the life of you or another beneficiary. Both trusts provide tax advantages for whomever puts assets into them, although individuals receiving payments may incur income taxes on amounts recieved. A charitable remainder trust can accept not only cash but also other assets including collectibles, securities and even real estate.

Looking altruistically at a charitable remainder trust, it can serve as a way to pass assets on to favorite charities, which can reduce potential estate taxes, once you know loved ones are provided for. This type of trust can also serve as a financial safety net for surviving spouses, who are often named as beneficiaries for trust payments throughout the remainder of their lives.

Consult the Pros
Choosing the right trust for your situation can be complicated, so it is advisable to consult an estate planning attorney and other trusted advisors before establishing this or any type of trust. It may make sense for you to discuss this idea with appropriate family members, too.


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