Charitable Remainder Trusts Revisited

Randall Dickinson pointed out another disadvantage, and potential trap, in charitable remainder trusts. In my example with the house, I had the donors living in the house as beneficiaries. The IRS sets forth private foundation rules that prohibit self-dealing (IRC section 4941). The donors in this example would be prohibited under these rules from living in the house they transferred to the trust.

Randall's comment underscores the complexity of these trusts. This should not keep someone with a charitable intent from exploring all options for their charitable giving. Charitable remainder trusts are bit one such option.

Thanks to Mr. Dickinson for his comment and input!