Wednesday, September 02, 2009

Is There Any Way Out of a CRT or Other Charitable Trust?

A couple of times of year I get a call from someone who is unhappy with a CRT or other Charitable Trust they are receiving payments from.

Either they no longer like the charity it was set up with, someone (the trustee) has mismanaged funds, they need a lump sum rather than the monthly payments they are receiving or the trust has lost money and they are afraid it will run out short of making the payments due.

Up until now, there haven’t been many options to make any significant changes, but recently I have met with a couple of companies that may have a viable solution. It is definitely worth exploring.

Upon review of your trust, you may be eligible for a cash offer of a lump sum payment in exchange for your future rights to payments from the trust. This lump sum may be taxed at capital gains tax rates versus ordinary income that you have been paying for your monthly check.

Currently, this option was only available to large corporations and investment firms, but now individual cases are being considered.

This can solve an immediate need for long term care expenses, a way to pass more money to heirs, and a way to disengage from a less than desirable situation with the charity.

You may even have an option to spread out the lump sum over a number of years to minimize the taxes if you wish.

If you or someone you know finds themselves in a similar situation, please give me a call to go over your options.

Paula Straub
760-917-0858 or 888-338-3036 toll free