When does ‘irrevocable’ mean ‘Yes, you can make a change’? New options for charitable remainder trusts can satisfy your philanthropic intent and give you more flexibility for changing life circumstances.

Atlantic Trust (now CIBC Private Wealth Management), 2016

Because a CRT is irrevocable, it cannot change. But income beneficiaries' goals and situations do change. The list of reasons why people sell or rollover their CRT income interests is much longer than the list of reasons why they set up their CRTs in the first place. Most income interest sales or rollovers occur because something has changed since the CRT was created.

Below is a partial list of changes in circumstances that can drive a CRT income interest sale or rollover:

  • Desire to transfer additional assets to children
  • Need or desire for a lump sum of cash
  • No longer need/want taxable income the CRT is distributing
  • Desire to simplify financial affairs
  • Frustration with the administrative costs and burdens of maintaining a CRT
  • Divorce
  • Concern over stock market volatility or economic uncertainty
  • Dissatisfaction with the CRT’s performance (often the case with NIMCRUTs)
  • Change in health status
  • Death of a spouse
  • Remarriage
  • Birth of a grandchild

As the industry leader in CRT Secondary Planning services, our review process has helped thousands of CRT beneficiaries decide whether or not they would benefit from the sale of their CRT’s income interest or a rollover to a new trust with different terms.

CRT Income Interest Sale

An income interest in a CRT is a capital asset that can be bought, sold, or exchanged – just like other capital assets (e.g., stocks, bonds, real estate).

CRT income beneficiaries interested in maximizing their own financial value can sell their income interest to a third party. The sale effectively converts their future CRT income into a cash payment today, typically at a price that is equal to or greater than the value of keeping it. In addition, the tax treatment of the sale proceeds may be more favorable than the tax treatment of CRT distributions.

CRT Rollover

Some CRT income beneficiaries are interested in finding ways their children or other family members can receive some or all of the value from a CRT. Some are interested in deferring or forgoing unneeded income from the CRT to avoid the related tax. Some have a mix of these goals. These people are often good candidates for a CRT rollover.

To learn more, please call us at 703-677-8747 or e-mail [email protected].