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Attorney Randy Ratliff

Charitable Remainder Unitrusts

Nashville Lawyer Helping Families With Estate Planning Needs

While the familiar “tried and true” estate planning documents such as powers of attorney and last will and testaments are still viable options for those with relatively simple and modest estates, there are many additional options for those who find themselves in more complex situations or who have considerable wealth. In addition to trusts that allow the settlor (the individual establishing the trust) to make special provisions for family members for whom an outright gift might be ill-advised for one reason or another, trusts can also allow the settlor to make gifts to a charity – while helping to minimize his or her estate for purposes of federal income taxation. Nashville estate planning attorney Randy Ratliff is here to help you design the best estate plan for your family’s unique needs.

Like other trusts, charitable remainder unitrusts are based on the simple concept of a trustee managing the settlor’s assets for the benefit of a particular beneficiary or group of beneficiaries. Some trusts are revocable, meaning that they can be changed at some point based on the settlor’s wants and needs. However, charitable remainder unitrusts fall into the category of an irrevocable trust – a trust that cannot be altered in most situations. Because of the permanent nature of such a fiduciary relationship, it is important that a person who is considering setting up a charitable remainder unitrust do so only after receiving sound legal advice from an attorney well-versed in trust and estate law. There may be other, potentially better options that should be taken into consideration before the trustor makes his or her final decision.

Deciding Which Estate Planning Option is Best for You

As with many types of popular trusts, charitable remainder unitrusts (sometimes called “CRUTs”) are designed to take advantage of the latest rules and regulations of the Internal Revenue Service. It is important to note that the IRS may change these rules from time to time, so it is important to consult an attorney periodically to make sure that you still have the most advisable estate plan in place. The basic idea behind a CRUT is for the settlor of the trust to place assets into a fiduciary relationship in which the trust distributes a fixed percentage of the value of the assets to a non-charitable beneficiary (typically, the settlor) during the settlor’s lifetime. After the settlor passes away (or, possibly at another set time), the remaining balance of the trust is distributed to a charity designated by the settlor.

So long as it is properly drafted and executed, a charitable remainder trust can work to reduce the gift and estate tax burdens that would otherwise apply to the settlor or his or her beneficiaries. Of course, if the applicable laws are not followed carefully, the trust might not meet the IRS qualifications of a CRUT, thus eliminating the possible tax benefits normally associated with such a trust.

Discuss Your Situation With an Estate Planning Lawyer in Nashville

Planning for one’s needs in old age, as well as taking steps to accomplish financial goals such as donations to charity, is a very important step. While discussing private matters with an estate planning attorney can feel awkward to some people, it is critical that the complicated task of estate planning be done by a competent, qualified professional. Attempting to “do it yourself” using forms from a book or the internet can be an extremely costly mistake. At the Randy Ratliff Law Offices, PLLC, we are proud to serve all of Davidson and Williamson Counties, including in those in Cool Springs, Brentwood, Franklin, Nashville, Antioch, Hermitage, Madison, Goodlettsville, and Joelton, providing accurate and dependable advice concerning many different types of trusts, as well as matters of probate and estate law. For an appointment to discuss a charitable remainder unitrust or other estate planning tool, call us now at 615-656-8282 or contact us online. Our office can also help with elder law matters (such as the Medicaid qualification process or pension benefits) and domestic relations cases (like divorce or child custody actions).