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Here's one - a Charitable Remainder Trust (CRT) allows you to donate your wealth, get a tax deduction on it and setup an income stream from it for as long as yo

Here's one - a Charitable Remainder Trust (CRT) allows you to donate your wealth, get a tax deduction on it and setup an income stream from it for as long as you're alive before the funds go to charity. This is highly simplified, but it's a way to avoid capital gains on your wealth and costs ~$3K to setup and doesn't require much "wealth" to begin with. How many people know about this? Probably very few. And that's my point.

llbeansandrice 5y ago
So this is just saying "When I die, donate anything left in the CRT to $charity. But as long as I'm alive, pay me $amount monthly?" That's..wild.
- lotsofpulp 5y ago
  In all my years, anytime someone says there’s this easy way to avoid taxes that no one is taking advantage of, it is because there is a catch or downside that does not make it worth it to be popular. In the internet era, information spreads pretty quickly, so I imagine a tax benefit will be quickly disseminated so either it is brand new or you should take it with a boulder of salt. https://www.investopedia.com/terms/c/charitableremaindertrust.asp https://www.investopedia.com/terms/c/charitableremaindertrus... In this case, this seems like a pretty big drawback. And I assume sure you cannot just set yourself up as beneficiary. > Charitable remainder trusts are irrevocable. This means that they cannot be modified or terminated without the beneficiary's permission. The grantor or trustor, having transferred assets into the trust, effectively removes all of her rights of ownership to the assets and the trust upon creation of its irrevocable status.
PragmaticPulp 5y ago
> Here's one - a Charitable Remainder Trust (CRT) allows you to donate your wealth, get a tax deduction on it and setup an income stream from it for as long as you're alive before the funds go to charity. The catch, of course, is that the funds actually get donated to charity in the end. It's not so much that people are unaware that this exists. It's that it's not actually an attractive option for most people who wish to leave their inheritance to their children.
- sakopov 5y ago
  There is definitely a catch and the catch is that you still pay taxes on that stream of income, but not as much as you would have if you paid the tax on capital gains and yes, some funds still go to charity in the end. Like I said, my description was simplified for brevity. Here's the full video [1] about this as it pertains to crypto (but it doesn't have to). He goes into explaining how to actually distribute the wealth to your family after your death (via Irrevocable Life Insurance Trust) at the end of the video. [1] https://www.youtube.com/watch?v=7CMks9_PVqs https://www.youtube.com/watch?v=7CMks9_PVqs

llbeansandrice 5y ago

So this is just saying "When I die, donate anything left in the CRT to $charity. But as long as I'm alive, pay me $amount monthly?" That's..wild.

lotsofpulp 5y ago
In all my years, anytime someone says there’s this easy way to avoid taxes that no one is taking advantage of, it is because there is a catch or downside that does not make it worth it to be popular. In the internet era, information spreads pretty quickly, so I imagine a tax benefit will be quickly disseminated so either it is brand new or you should take it with a boulder of salt. https://www.investopedia.com/terms/c/charitableremaindertrust.asp https://www.investopedia.com/terms/c/charitableremaindertrus... In this case, this seems like a pretty big drawback. And I assume sure you cannot just set yourself up as beneficiary. > Charitable remainder trusts are irrevocable. This means that they cannot be modified or terminated without the beneficiary's permission. The grantor or trustor, having transferred assets into the trust, effectively removes all of her rights of ownership to the assets and the trust upon creation of its irrevocable status.

PragmaticPulp 5y ago

> Here's one - a Charitable Remainder Trust (CRT) allows you to donate your wealth, get a tax deduction on it and setup an income stream from it for as long as you're alive before the funds go to charity. The catch, of course, is that the funds actually get donated to charity in the end. It's not so much that people are unaware that this exists. It's that it's not actually an attractive option for most people who wish to leave their inheritance to their children.

sakopov 5y ago
There is definitely a catch and the catch is that you still pay taxes on that stream of income, but not as much as you would have if you paid the tax on capital gains and yes, some funds still go to charity in the end. Like I said, my description was simplified for brevity. Here's the full video [1] about this as it pertains to crypto (but it doesn't have to). He goes into explaining how to actually distribute the wealth to your family after your death (via Irrevocable Life Insurance Trust) at the end of the video. [1] https://www.youtube.com/watch?v=7CMks9_PVqs https://www.youtube.com/watch?v=7CMks9_PVqs