By Jordon Rosen, CPA, MST, AEP® (Distinguished)
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“To be a Jew is to keep faith with the past by building a Jewish future.” — Rabbi Lord Jonathan Sacks
How have you and your family been positively impacted by Jewish programs in our community? Which of your values do you want to secure for future generations? I have always preached that most charitable giving techniques can be accomplished either at death or during your lifetime. Most of us would like to support one or more organizations which have touched our lives or that of a loved one in a meaningful way. A common concern is that most people can’t afford to part with a large sum of money or securities while they are alive, since they rely on the income from those assets during their retirement years. Creating a charitable remainder trust (CRT) however, can accomplish both objectives.
The basics is that you create and fund a CRT with cash and/or appreciated securities or other appreciated assets such as real estate or an interest in a closely held business. The CRT can be created for a set number of years (not to exceed 20) or for your lifetime or a joint lifetime with someone else. Based on the terms of the trust, you would receive an annual income distribution, and when the trust terminates, all remaining assets go to the charity(ies) that you designated in the trust document.
There are two flavors of CRTs, (1) an annuity trust which pays a set percentage of the initial contribution to you each year and (2) a unitrust which pays a set percentage of the value of the trust as redetermined annually. You get a partial charitable deduction of the amount you contribute to the CRT (not a full deduction since you are retaining a right to the income), based on your age, IRS tables, and current interest rates. For example, a 75-year-old creating a 5% charitable remainder unitrust trust with $250,000 in January 2026, would receive an initial annual distribution of $12,500 and be entitled to a charitable deduction of about $142,000. A good strategy (but not the only strategy) for creating a CRT would be in a year where you have a large spike in income from a bonus or the sale of securities or real estate, where the charitable deduction can be used to offset all or a part of the gain.
The assets you contribute to the CRT are excluded from your estate. By contributing appreciated assets, you also avoid paying tax on the appreciation. The CRT will then sell the assets but pays no tax on the gain since it is considered a tax-exempt charitable entity. Furthermore, if you own a concentrated position in a particular security or mutual fund, contributing these securities to a CRT would allow you to diversify. So, if the assets you contributed were yielding (e.g.) 2%, the trust would (1) sell the securities without paying capital gains tax and then (2) diversify and invest in higher yielding securities or bonds which then creates increased cash flow to you each year in the case of a unitrust. In summary, you have parted ways with the assets, but not the income, and received a tax deduction to boot.
Building a legacy that promotes Jewish values in Delaware, Israel, and beyond strengthens an organization’s mission and fosters social justice, ethical living, and positive change in pursuit of Tikkun Olam, repairing the world.
Thank you to those who have finalized their commitment to create a lasting legacy. For those that have not yet finalized their intent or wish to create a legacy through the Life and Legacy program, please contact Legacy@ShalomDel.org or call 302-427-2100.
The above information is intended for educational purposes only and should not be acted upon without first consulting a competent tax professional.
About the Author
JORDON ROSEN is a retired certified public accountant focusing on estate and legacy planning. He is a member of Congregation Beth Shalom and is treasurer of the Jewish Federation of Delaware.
