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