Many Texans want to give back to their communities but worry about sacrificing financial security in retirement. A charitable remainder annuity trust (CRAT) offers a way to achieve both—providing a steady income stream while ensuring that a chosen charity benefits in the future.
At the Law Office of Carey Thompson, we help individuals in El Paso and Dallas-Fort Worth establish charitable trusts that align with their financial and philanthropic goals. Call today to schedule a consultation and explore whether a CRAT is right for you.
What Is a Charitable Remainder Annuity Trust (CRAT)?
A charitable remainder annuity trust (CRAT) is an irrevocable trust designed to provide financial security while supporting a charitable cause. It allows you to transfer assets into a trust, receive fixed annual payments, and leave the remaining assets to charity when the trust term ends.
Key features of a CRAT include:
- Fixed Income – The trust pays a set amount annually, regardless of market fluctuations.
- Irrevocable Structure – Once assets are placed in the trust, they cannot be taken back.
- Charitable Benefit – At the end of the trust’s term, the remaining assets go to one or more charities of your choice.
- Tax Advantages – Donors may receive an immediate charitable income tax deduction and avoid capital gains tax on appreciated assets.
CRATs are often used by individuals looking to convert real estate, stocks, or other investments into a steady income stream while making a lasting philanthropic impact.
Who Should Consider a Charitable Remainder Annuity Trust (CRAT)?
A CRAT is an effective estate planning tool for individuals who want to support a charitable cause while securing a reliable income. It is particularly beneficial for:
- Retirees and individuals seeking stable income: CRATs provide fixed annual payments, making them ideal for those who want predictable financial support in retirement.
- Individuals with highly appreciated assets – Selling real estate, stocks, or a business can result in significant capital gains taxes. A CRAT allows you to convert these assets into income while avoiding immediate tax liabilities.
- High-net-worth individuals – Those looking to reduce estate taxes while leaving a charitable legacy can benefit from a CRAT’s tax advantages.
- Philanthropic-minded individuals: A CRAT offers a structured way to ensure that a portion of your wealth benefits a nonprofit organization.
A CRAT is ideal for those who want to balance personal financial security with long-term charitable giving.
Key Benefits of a Charitable Remainder Annuity Trust (CRAT)
A CRAT provides financial security and charitable impact, making it a valuable estate planning tool. Some of the key benefits include:
- Fixed Lifetime Income – The trust offers a predictable, stable income stream, especially beneficial for retirees or individuals seeking financial security.
- Tax Advantages – Donors may receive an immediate income tax deduction based on the value of the charitable remainder and avoid capital gains taxes on appreciated assets placed in the trust.
- Estate Tax Reduction – Assets transferred into a CRAT are removed from the taxable estate, potentially lowering estate tax liability.
- Philanthropic Impact – Individuals can leave a lasting charitable legacy by designating a nonprofit organization as the trust’s remainder beneficiary.
- Asset Diversification – A CRAT allows you to convert illiquid assets, such as real estate or stocks, into a steady source of income while ensuring future charitable contributions.
A CRAT offers significant advantages for those looking to maximize financial and charitable goals.
How the Law Office of Carey Thompson Can Help
Setting up a charitable remainder annuity trust requires careful planning to ensure it meets your financial and philanthropic goals. At the Law Office of Carey Thompson, we take the time to understand your unique situation and guide you through every step of the process.
From selecting the right assets to fund the trust to structuring payments that align with your needs, we provide personalized advice to help you maximize your CRAT. Our experience serving clients throughout El Paso and Dallas-Fort Worth makes the process straightforward and stress-free.
Whether you’re looking to reduce taxes, secure income for retirement, or leave a lasting legacy, we are the trusted choice.
CRAT Attorney Serving El Paso and Dallas-Fort Worth
If you are considering a CRAT, now is the time to take action. Contact the Law Office of Carey Thompson today to get started with an experienced CRAT attorney. We proudly serve clients in El Paso, Dallas-Fort Worth, and surrounding areas, offering customized estate planning solutions.