Charitable Remainder Annuity Trust (CRAT)
This An Annuity Trust, also called a Charitable Remainder
Annuity Trust or CRAT, pays a fixed
percentage of the initial value of trust assets with a 5%
minimum income required to be paid to the income beneficiary
annually. For example, a CRAT with an initial value of $2,000,000
and a 5% payout would pay $100,000 annually to the income
beneficiary, regardless of investment performance. Income
distribution is mandatory and principal may be invaded to
satisfy the requested payout. No additions to the principal
may be made after the trust is established.
An annuity trust is usually used for someone who wants a
guaranteed income stream each and every year. Regardless of
the performance of the trust, the income is paid each year
Click here for additional FREE Information
on an Annuity Trust or CRAT.
We have also put together a hypothetical case study that
illustrates a Charitable Remainder Annuity Trust in use. Click
here to view the study as an adobe .pdf file.
Harding Financial Services, LLC
The information contained on this site is for educational
purposes only, it is not intended to be professional tax or
legal advise; consult a tax advisor about your specific situation.