Welcome to the
Financial and Estate Planning Council of Metro Detroit
Charitable Remainder Charitable Remainder TrustTrust
Presented byPresented by
Michael W. Halloran, AEP, CLU, ChFC, Michael W. Halloran, AEP, CLU, ChFC, CFPCFP®®
November 1, 2011November 1, 2011
Mechanics of a CRTMechanics of a CRT
Annuity Trust Annuity Trust
Fixed PaymentFixed Payment
Future Future Contributions Contributions
MechanicsMechanics
Unitrust Unitrust
Percentage of Percentage of paymentpayment
Future Future contributionscontributions
MechanicsMechanics
Termination of TrustTermination of Trust
Advantages Advantages
Charitable GiftCharitable Gift
Tax DeductionTax Deduction
Estate ConsequencesEstate Consequences
Tax ConsequencesTax Consequences
Income Tax at FormationIncome Tax at Formation
Taxation on income Taxation on income distributionsdistributions
– Ordinary incomeOrdinary income
– Capital gainsCapital gains
– Tax-exempt incomeTax-exempt income
– CorpusCorpus
Gift taxGift tax
– Income interest in non-charitable Income interest in non-charitable beneficiary.beneficiary.
– Annual exclusion and marital Annual exclusion and marital deduction.deduction.
– Charitable deduction for present value Charitable deduction for present value of remainder interest.of remainder interest.
Estate TaxEstate Tax
– InclusionInclusion
– DeductionDeduction
Common FeaturesCommon Features
IrrevocableIrrevocable
B) Distributions FrequencyB) Distributions Frequency
C) Sprinkle provisionsC) Sprinkle provisions
D) Expiration of TrustD) Expiration of Trust
E) Lives and yearsE) Lives and years– Living individualsLiving individuals
DurationDuration
PayoutsPayouts
MinimumMinimum
MaximumMaximum
Remainder Interest RulesRemainder Interest Rules
Wealth Replacement IdeasWealth Replacement Ideas
Life InsuranceLife Insurance
– Individual Life InsuranceIndividual Life Insurance
– Joint and Last to Die Life InsuranceJoint and Last to Die Life Insurance