Would it make sense to donate my Individual Retirement Account (IRA) to a charitable remainder trust?
Creating a charitable remainder trust (CRT) automatically entitles you to several tax benefits. But you can get some extra benefits if you donate your IRA to the trust. According to “The Truth About Money” (Georgetown University Press, Washington, D.C.), “Another good idea if you want to make bequests to a CRT is to donate your IRA (or a portion of it) instead of your cash or other assets. Why? Because when you make a donation from your IRA, you avoid both the estate tax and the income tax on that money. That, in effect, leaves more for your family — or the charity itself.” What are charitable lead trusts? If you create a charitable lead trust and place some or all of your assets into it, the charity you select will get all the annual income the trust generates for the length of time you specify in the trust agreement. When the trust ends, your heirs will get back whats left. Whats in this type of arrangement for you? The primary advantage is that the gift to your heirs will be taxed
