How it works.
You transfer assets — often appreciated stock or real estate — to an irrevocable charitable remainder trust. The trust pays you, and your spouse if you choose, income for life or for a set term of up to 20 years. When the term ends, what remains goes to the charities you've chosen.
Annuity trust (CRAT)
Pays a fixed dollar amount each year. You can't add assets later.
Unitrust (CRUT)
Pays a fixed percentage of the trust's value, recalculated every year. You can add assets later.
Federal payout rules
The annual payout must be between 5% and 50%, and the amount projected for charity must be at least 10% of the starting value (26 U.S.C. § 664).
Charitable lead trust
The reverse design: the charity receives payments first, and the remainder goes to your family.
The benefits.
- Sell without an immediate capital gains bill. The trust itself is generally tax-exempt, so gains are taxed gradually as you receive payments.
- A charitable income tax deduction in the year you fund the trust, for the projected value going to charity.
- Lifetime income from assets that may have paid little.
- Assets out of your taxable estate.
- A lasting legacy for the causes you care about.
A charitable remainder trust makes the most sense when you own property that has grown significantly in value, want income from it, and genuinely want a charity to receive what's left. Your heirs won't receive the trust's assets, so many people pair it with life insurance to replace that inheritance.
We coordinate with your CPA or financial advisor on the tax side; the trust must meet federal requirements to qualify.
Pricing.
Trusts are quoted after a consultation, because the right design depends on your family, your property, and your goals. The documents that usually accompany a trust are flat-fee:
Texas
New Mexico
Part 1 of the NM Advance Health-Care Directive$150
Part 2 of the NM Advance Health-Care Directive$100
Flat fees are per person and cover preparation of each document. The first hour of an estate planning consultation is free; if a consultation runs longer than one hour and you don't purchase an estate planning package, additional time is $300 per hour, prorated to the nearest quarter hour. Court filing and county recording fees, if any, are separate. Prices effective through December 31, 2027.
Common questions.
Can I receive the income myself?+
Can I change the charity later?+
What assets work best?+
Texas estate planning services are provided by Jeff Barnett, Of Counsel (Texas Practice), of Barnett & Leuty, PC, Austin, Texas, licensed in Texas. New Mexico estate planning services are provided by Shawn Barnett, Managing Attorney, licensed in New Mexico. This page provides general information, not legal advice; reading it does not create an attorney-client relationship.