Artists Seeking Income for Life…

by Keith Jackson

As a successful Artist you have worked hard to create a lasting memory, perhaps a statement of something that you would like to have as a legacy. Something of your making that stands as a testament that you made a contribution that mattered even after you were gone.

A Charitable Remainder Trust (CRT) can do all this and more, and many investors are finding them to be ideal retirement and estate planning solutions precisely because of some great features and benefits like:

- Potentially reducing your current income taxes through an income tax deduction

- Perhaps reducing or eliminating your estate taxes

- Maybe you would like to benefit a charity or charities; it is possible a CRT could benefit your heirs if you use all or any portion of the Trust income you receive from the Trust to purchase a life Insurance policy to benefit your heirs.

- You may even receive more income (net of income taxes) over a lifetime than if you had sold the asset yourself.

This is not an uncommon tool and is used by individuals wishing to create a legacy as well as today’s ever more savvy educational and charitable institutions. Often these plans combine the benefits of an immediate income tax deduction and lifetime income from the charitable gift. In fact, many types of investments that you are already familiar with can be owned by CRTs. For example, a variable annuity inside a CRT can be an option, as can mutual funds and individual securities.

But just what is a CRT? It’s a tax-exempt, irrevocable Trust into which the Grantor, that’s you or for you, the journeyman Artist, that generous supporter that believes in your work, transfers assets such as stocks, cash and other investment securities. The CRT can be designed for the Grantor, a family member or even for you that journeyman Artist, to produce a stream of income for life or for a specified number of years. The income stream can he in the form of a fixed-dollar amount based on a percentage of the trust’s initial value, or it can be based on a percentage of the trust’s value, determined at the beginning of each year. In either event, when the CRT is terminated at the time of death of the income beneficiary(s), or the expiration of the specified term of years, the remaining Trust balance assets will pass on to the charity(s) of your choice.

Several parties can potentially benefit when you have a CRT as part of your estate plan and investment portfolio: your heirs, the charity or charities of your choice, you and the other CRT lifetime beneficiaries. You may also be able to increase your after-tax income, reduce current income taxes, obtain estate tax reduction and give a gift to a charity or charities of your choice. You can also benefit your heirs by making them beneficiaries of a separate Trust which owns a life insurance policy, which is typically equal in face value to the amount contributed to the CRT and can be free of estate taxes upon your death.

What’s more, you can feel satisfied because you have given a donation to the people and places that matter to you most.

So, if the idea of potentially reducing taxes, increasing your income, and benefiting your heirs and charities appeals to you, consider setting up a CRT. If you and your tax advisors determine that a CRT is an appropriate opportunity for you, your professional Financial

Consultant can help you determine the right investments for such a Trust.


For additional information on Charitable Remainder Trusts contact Keith Jackson, Financial Consultant, Janney Montgomery Scott, LLC., 215-665-6477 at 1801 Market St Philadelphia, PA 19103 or email at kejackson@jmsonline.com.