For business owners navigating significant liquidity events, such as the sale of a business, these transitions offer unique opportunities to expand their philanthropic vision while preserving financial stability. At Parcion Private Wealth, we partner with them to create tailored strategies that integrate wealth management with impactful charitable giving. One highly effective tool in our Philanthropic Plans is the Charitable Remainder Trust (CRT), which provides meaningful benefits for donors and the charitable organizations they support.

WHAT IS A CHARITABLE REMAINDER TRUST (CRT)?

A Charitable Remainder Trust is an irrevocable trust that supports one or more non-charitable beneficiaries through annual payments, with the remaining assets passing to a designated charity at the end of the trust’s term. CRTs come in two structures:

• CHARITABLE REMAINDER UNITRUST (CRUT): Distributes a fixed percentage of the trust’s current market value annually, adapting with the trust’s growth or decline.
• CHARITABLE REMAINDER ANNUITY TRUST (CRAT): Pays a fixed annual annuity based on the initial funding amount, providing predictable payments.

CRTs are a versatile choice for families aiming to diversify low-basis assets, generate an income stream, and create a tax-advantaged charitable legacy.

KEY BENEFITS OF CHARITABLE REMAINDER TRUSTS

CRTs may offer significant tax benefits for donors. Upon funding the trust, donors can receive an immediate income tax deduction based on the value expected to pass to charity. Additionally, CRTs are tax-exempt, enabling appreciated assets within the trust to be sold without immediate capital gains taxes. Instead, these gains are distributed gradually, providing tax deferral for beneficiaries.

CRTs may also remain resilient in a variety of economic conditions , including rising interest rates, making them a flexible option for families balancing wealth preservation with philanthropic impact.

CREATING IMPACT THROUGH CHARITABLE REMAINDER TRUSTS

At Parcion Private Wealth, we work closely with business owners and their professional advisors to develop customized Philanthropic Plans that maximize both personal financial security and charitable impact. From asset selection to trust investment strategy, we help families create legacies that reflect their values and support the causes they care deeply about.

To review our case study and learn more about how Charitable Remainder Trusts can support your philanthropic goals while optimizing your wealth management strategy, download our full whitepaper, “A Strategic Approach to Philanthropy: Charitable Remainder Trusts.”