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Termination of Charitable Remainder TrustsTermination of Charitable Remainder Trusts

“You’ve got to know when to hold ‘em, know when to fold ‘em.”

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Margaret E. St. John, Heather J. Rhoadesand 1 more

September 24, 2014

26 Min Read
Termination of Charitable Remainder Trusts

Kenny Rogers could well have been singing about charitable remainder trusts (CRTs). Donors who create inter vivos CRTs want to: (1) provide life income for themselves (and sometimes also for a survivor); and (2) make a significant gift to charity on the CRT’s termination.

Federal tax law encourages generosity by giving itemizers an income tax charitable deduction for the value of their remainder interest. Capital gains are avoided on funding a CRT with appreciated property. Gains are taxable only to the extent that they’re deemed distributed to the life beneficiary under the 4-category taxation regime. 

Almost all life beneficiaries keep their CRTs for their lifetime; they want life income. So, they hold ‘em.

But, change is inevitable (exce...

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About the Authors

Margaret E. St. John

Margaret E. St. John is an associate in the New Haven, Conn. office of Withers Bergman, LLP.

 

 

Heather J. Rhoades

 

Heather J. Rhoades practices in the areas of estate planning, estate settlement, trust administration and charitable planning.  She is resident in the West Hartford office where she is a Principal in the Private Clients Group.  She is a member of the firm’s charitable planning group.

Heather received her B.A. from the University of Connecticut and her J.D. from the University of Connecticut School of Law.  She now serves as a mentor for UCONN law students in their first year.

Heather is admitted to practice in Connecticut and is a member of the American, Connecticut and Hartford County Bar Associations.  She is also a member of the Executive Committee of the Estates and Probate Section of the Connecticut Bar Association and is co-chair of the continuing legal education subcommittee of this Section.  Heather is a member of the Hartford Foundation for Public Giving Professional Advisory Committee and the UCONN Foundation Planned Giving Professional Advisory Council.  In addition, Heather is a Director of the Estate and Business Planning Council of Hartford and chair of the seminar committee of the Council.

Heather is a frequent speaker on estate and tax planning issues and has authored a number of articles focusing on various estate planning subjects.

Conrad Teitell

President, Taxwise Giving

Conrad Teitell, A.B., LL.B., LL.M., 98.6. Chairman, National Charitable Planning Group, Cummings & Lockwood, Stamford Conn. For information about Conrad Teitell's publications and lectures visit taxwisegiving.com.