Many planners believe a CRT only works for older income beneficiaries.
However, there is a way for a family to fund both philanthropic goals and meet educational needs. In the Watson family, Richard and Pam have several preteen grandchildren to help through college. Instead, a CRT lets them ensure their own philanthropic legacy and still provide funds for educational expenses. While most charitable trusts are intended to last over a life expectancy, this trust is designed to terminate after just 10 years and pass the remainder to the family's charity, a donor advised fund at the local community foundation. While the trust's performance depends on the underlying investments, it's very important to select a tool that allows precise control of income recognition.