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 without change.

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.