          
          
          
          The Charitable Remainder Trust:
          
          
               Prefaced by that short historical review, we turn
          to consideration of the charitable remainder trust -
          the CRT, a congressionally approved statutory device
          allowing those people of wealth who wish to "do good" -
          to do very well indeed.  As you will see, it is no
          wonder the CRT has such wide popularity among the tax
          paying cognoscenti.
               The CRT is a tax-exempt irrevocable living trust
          with one or more living income beneficiaries, and one
          or more qualified tax-exempt charitable remaindermen. 
          And remember "irrevocable" means what it says: the
          transferred property is no longer yours.  As a general
          rule, most experts offer the opinion that for feasible
          operation, a CRT should start with assets worth at
          least $50,000; but others say as little as $20,000 is
          financially sound if the donor is young and the term of
          years for the trust is long, or if high-yield
          investments such as a mutual fund are pursued. 
               Although the discussion here centers on living
          charitable remainder trusts, a CRT also can be created
          in a last will and testament.  A "testamentary CRT" is
          relatively rare, with a testator directing that a named
          percentage of the value of the trust be paid to the
          beneficiary for life, with the remainder afterward
          going to a qualified charitable organization.  This
          arrangement allows the present value of the charity's
          deferred interest to be deducted from federal estate
          taxes. 
               The single most distinctive characteristic of the
          CRT, and the key to its associated tax and income
          benefits, is found in the identity of the ultimate
          beneficiary of the trust - the "remainderman", to use
          the quaint English common law term.  When a CRT has
          fulfilled its terms, run its legal course, and is ready
          to go out of business, the law says the remaining
          assets ("the charitable remainder") must go to a
          "qualified" tax-exempt charitable organization as
          defined by the Internal Revenue Code.  
               Under the Internal Revenue Code the donor has the
          right to change the ultimate remaindermen at any time
          before final distribution of the trust.  So long as one
          charity is replaced with another IRS "qualified"
          charitable organization, the CRT's tax exempt status
          remains secure.  Here's a tip: if you have a specific
          charity in mind (and you probably do), obtain their
          agreement to pay the creation costs of the CRT in
          return for your including in the trust declaration a
          waiver of your right to change remaindermen, making
          them the sure winners.
               Calling the CRT a "qualified trust," is yet
          another name you will sometimes hear, meaning both that
          the CRT itself "qualifies" as tax exempt, and that the
          object of its ultimate distribution is also a
          "qualified" tax exempt organization.
               That Congress should be so generous in allowing
          the grantor of a CRT so many tax breaks is perfectly
          consistent with the historic background we discussed -
          using taxes and tax concessions not just for revenue
          purposes, but to promote policy objectives as well.  In
          exchange for his or her ultimate gift to charity, the
          CRT donor avoids many of the onerous asset-depleting
          tax burdens otherwise imposed by government - all in
          the name of promoting sweet charity which, it is
          rightly said, "begins at home."
               With the CRT, it certainly does.
               Let us now explore some of these attractive tax
          advantages that flow from the creation of a CRT.
          
          
          
          
