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ARTICLE · 06 SEPTEMBER 2016

Combining Charitable Remainder Trusts And Life Insurance

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Because the estate tax exemption currently tops $5 million, fewer people need life insurance to provide their families with the liquidity to pay estate taxes.

United StatesWealth Management
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Because the estate tax exemption currently tops $5 million, fewer people need life insurance to provide their families with the liquidity to pay estate taxes. But life insurance can still play an important part in your financial plan, particularly in conjunction with charitable remainder trusts (CRTs) and other charitable giving strategies.

How Does a Charitable Remainder Trust (CRT) Work?

A CRT is established through a transfer of assets into trust during your life.  In exchange for this transfer, the trust provides an annual stream of payments to one or more noncharitable beneficiaries for a term of years, not exceeding 20, or for your life or the joint lives of you and your spouse. When the noncharitable interest expires, the remainder interest in the CRT is distributed to charity.

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