For many people today, supporting a charitable organization may offer them a way to give back to something that they benefited from or to support an effort they believe in and want to see succeed.

When making an estate plan, a person may choose to incorporate planned giving to complement their other choices for family members. Some trusts may offer the type of flexibility and benefits they seek.

The charitable remainder trust

As explained by Fidelity Investments and as indicated by the name, a charitable remainder trust benefits a charitable organization, but also benefits the individual who establishes it and perhaps their family members as well. A person titles certain assets into the trust. The asset value provides interest payments to that person or other beneficiaries should they choose. Once the beneficiary dies, any remaining funds flow to the designated charity. More than one charity may be named in a charitable remainder trust.

Two types of CRTs

One form of CRT allows people to make subsequent contributions after establishing the trust and one does not. In the former, the charitable remainder unitrust, the beneficiaries receive payments reflecting a designated percent of the trust’s value. In the latter, the charitable remainder annuity trust, the beneficiaries receive payments reflecting a set dollar amount.

Retirement accounts and CRTs

According to Forbes, a person may choose to title their retirement account into a charitable remainder trust with their children or grandchildren as the designated beneficiaries. This allows the person the opportunity to provide financial support to their loved ones for the rest of their lives.