Charitable Remainder Trusts: A Legacy of Income, Impact, and Intention

Neal Richards |
Categories
Finance
Tax Planning

At Axiom Wealth Strategies, we believe that smart financial planning is about more than just numbers; it’s about aligning your wealth with your values. When your goals include giving back, providing for loved ones, and minimizing taxes, one tool stands out as both strategic and meaningful: the Charitable Remainder Trust (CRT).

What Is a Charitable Remainder Trust?

A Charitable Remainder Trust is an irrevocable trust that allows you to:

  • Contribute cash or appreciated assets (like stocks, real estate, or even business interest in some cases)
  • Receive income for life, joint life, or a set term
  • Eventually direct the remaining assets to a qualified charitable organization (501(c)(3))

It’s a forward-thinking approach that merges philanthropy with financial savvy - an ideal solution for those who want to live generously and strategically.

Two Options to Choose From:

  • Charitable Remainder Annuity Trust (CRAT)
    • Pays a fixed annual amount.
    • No further contributions allowed after setup.
  • Charitable Remainder Unitrust (CRUT)
    • Pays a percentage of trust value, recalculated annually.
    • Accepts additional contributions over time.

Both offer unique advantages depending on your goals, cash flow needs, and estate plan.

Why Use a CRT?

At Axiom Wealth Strategies, we ask the deeper questions. What do you want your wealth to say about you? What legacy are you building? 

A CRT can support those intentions with:

  1. Current Income - Receive annual payments for life or a set period, for yourself or loved ones (5% is minimum CRUT payout rate).
  2. Immediate Tax Deduction -  Claim a charitable income tax deduction based on the present value of the future charitable gift (10% remaining value required).
  3. Capital Gains Tax Deferral - Sell highly appreciated assets inside the trust without triggering immediate capital gains taxes (although not all assets qualify).
  4. Estate Tax Reduction - Remove the trust assets from your taxable estate as an irrevocable gift.

Living Your Values Through Your Wealth

Creating a CRT isn’t just a technical decision, it is a reflection of how your would like your legacy to be remembered in the future

But CRTs are not for everyone. They are irrevocable and governed by specific IRS rules. You must designate a qualified 501(c)(3) nonprofit, and the projected charitable remainder must be at least 10% of the trust’s initial value.

This is a highly structured planning tool that permanently sets certain parameters in place.

Is a CRT Right for You?

Consider a Charitable Remainder Trust if:

  • You want to support a cause you deeply care about,
  • You own appreciated assets and wish to avoid immediate capital gains tax,
  • You value income now and impact later,
  • And you’re ready to structure your wealth with clarity, purpose, and long-term vision.

Let’s Build a Legacy Together

At Axiom Wealth Strategies, we don’t just manage money, we help make meaning out of it. Whether you're driven by charitable goals, family legacy, or tax efficiency, our planning process is designed to make the most meaningful life self-evident.

Let’s explore whether a Charitable Remainder Trust belongs in your plan.

Schedule a consultation with us today to start the conversation.

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