Broker Check
The Role of a Charitable Remainder Trust Attorney in Your Philanthropic Journey

The Role of a Charitable Remainder Trust Attorney in Your Philanthropic Journey

March 25, 2024

A charitable remainder trust (CRT) can be an attractive way to save taxes, provide for your loved ones, benefit from tax advantages, and give back to the charities you hold dear. Unfortunately, setting up a CRT can be complex and should be trusted to a dedicated charitable remainder trust attorney familiar with the tasks and duties it will require. 

What exactly does a trust attorney contribute to the formation of a CRT? Here’s a quick crash course on how a charitable remainder trust attorney can benefit your financial planning and trust formation. 

Legal Advice and Planning

Before you can determine whether a charitable remainder trust is the savviest financial move for your philanthropy and beneficiaries, a trust attorney will assess your plan. They will take a closer look at your financial status to come up with a plan that will protect you, improve the financial future of your beneficiaries, and benefit the non-profits you wish to donate to. 

In other words, the first thing they will do is offer you legal advice and help you cultivate a unique plan that aligns with your priorities. A charitable remainder trust may not be right for everyone, so it is crucial to have a trust attorney assess your situation. 

Charitable Giving Strategies

Sometimes, a financial advisor may recommend that you do all of your charitable giving now to reduce your taxable estate and take the tax deduction. However, that’s not always the best way to move forward. A charitable remainder trust can also reduce the size of your taxable estate and may be the better way to go. 

With a charitable remainder trust, you donate assets to your trust which allows you to take a tax deduction in the here and now. Those assets are then invested in income-producing streams so that they continue to grow as the years pass. The income and distribution of assets are doled out to a beneficiary for a set period or their lifetime. The remainder goes to the charity you select during the formation of the trust. You can also retain the right to change the charities any time you like. 

This is often a great strategy because it reduces income taxes in the year the donation was made, makes you exempt from capital gains taxes from the sale of those assets, and reduces your estate taxes for your loved ones upon your passing.

However, a charitable remainder trust is not the only vehicle for donating to charity. You could make an outright donation right now, set up a donor-advised fund, or create your own charitable foundation. You can even combine strategies by setting a donor-advised fund as your charitable beneficiary, which allows you time to choose your charity at a later date. 

A trust attorney can help you decide which move is right for your portfolio and estate.  

Wealth Protection and Tax Planning

Tax planning to minimize your tax liability is one of the many benefits of hiring a charitable remainder trust attorney to help you with long-term wealth planning. Estate taxes can pack a punch to your beneficiaries if your estate happens to be over the federal estate tax exemption ($13.61 million in 2024). The goal of a trust attorney would be to minimize the amount of money funneling from you and your loved ones into the pockets of the federal or state governments. 

In addition to protecting your money and assets from estate taxes, they can also make plans to shield that money from creditors or lawsuits. If your beneficiary works in a high-risk profession or is generally bad with money, a charitable remainder trust attorney can help you protect their trust distributions. 

Drafting Legal Documents

A good trust attorney will help you establish a CRT that is perfect for you by detailing conditions that dictate how assets will be distributed. In addition to setting up the CRT, other documents may need to be drafted to protect your charitable giving and beneficiaries including a last will and testament, advance directives, and powers of attorney. 

This can ensure that your money and assets get distributed to your loved ones and to charity in the exact way that you desire. They will help you fund the trust as well as set the conditions for the release of funds to those parties specified. A trust attorney can walk you through whatever stipulations you want to put in place to meet your needs. 

Never skip getting the legal documentation sorted out when funding a CRT. This helps protect all of your final wishes. 

Coordinating with Other Advisors

Charitable remainder trusts often require a trust attorney to do more than simply set up the paperwork to release funds when ready. Along with handling the legal aspects of forming a trust, attorneys often have to coordinate with financial, legal, and real estate aspects of your estate. After all, trusts play a large role in your overall estate plan

To this end, your charitable remainder trust attorney will need to coordinate with other experts to ensure that your trust is properly funded, protected under the law, and functions in your best financial interests. Magellan Planning Group has all of these services under one roof, while others may contract out to get advice about the next right move for your trust. We believe fragmented advice leads to a fragmented plan.

Ongoing Consultation and Administration

Setting up a charitable remainder trust is not a one-and-done process. A good trust attorney will continue to consult with you and monitor the administration of your trust funds. 

Some types of CRTs permit you to continue funding it with assets years down the line while others are set in stone after the first transfer. Collaborate with your trust attorney to make the decisions that will most benefit you. 

They should work with you on the distribution of assets to a beneficiary (if they will be given in your lifetime) or directly with your loved ones after your passing. Make sure that your trust is still the best thing for your philanthropic efforts with this ongoing consultation. 

Establish Your Charitable Remainder Trust with Magellan

Does a charitable remainder trust sound like the right move for your philanthropic journey? Get all of the services you need under one roof with Magellan Planning Group, including a knowledgeable charitable remainder trust attorney who can best serve your needs. Along with our experts in estate, financial, legal, and tax planning, you can get everything in a one-stop shop!

Contact us today to learn more about our services and how we can help you with trust planning.


This material provided by Kevin Meaders was written by Axle Eight, a non-affiliate of Magellan Planning Group and Cetera Advisor Networks LLC.

For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.