top of page

What is a



A CRAT is a unique estate planning tool that allows you to make a charitable contribution while also providing a fixed income stream to a designated beneficiary. By donating to a CRAT, you can receive an immediate tax deduction for the value of the remainder interest that will eventually go to the charity upon termination of the trust.


    WHY DO A CRAT?   

  1. Helps you avoid depreciation recapture on machinery. 

  2. Helps you avoid self-employment tax on grain sales and livestock sales. 

  3. Prevents you from spiking your income into the highest bracket in a single year. 

  4. Spreads out the income over the number of years or lifetime specified in the CRAT, thus allowing you to pay less income tax overall. 

  5. Because income is spread out over several years, you are likely to receive the income in lower income tax brackets. 

  6. You can sell the grain all at once inside the CRAT so you don’t miss out on higher grain prices. 

  7. You can sell machinery all at once inside the CRAT so it doesn’t decrease in value by holding on to it for years. 

  8. CRATs are “charity for the uncharitable.”

    • If you are concerned about income taxes as you end your farming career, CRATs are one of the best vehicles to allow you to manage your income tax consequences, even if you otherwise would not have given to charities. 

    • If you are charitably inclined, CRATs are an extremely tax efficient and tax advantaged way to give to charity, all while retaining an income stream from the equity you have accumulated in the contributed assets. 

    • It’s not about charitable giving – it’s about the income tax savings. 

  9. Most CRAT illustrations will show that you will get back more over the life of the CRAT than you originally contributed. The longer the CRAT period, the more likely this is to be true, but it can also work with only a five year period (depending on stock market performance). 

  10. Any income inside the CRAT that is not paid out is not taxed at the high trust rates. It is merely held over to make payments in future years or to be paid to the charitable remainder beneficiaries. 


We can help you explore the benefits of a CRAT and provide guidance on how to set up a trust that meets your specific needs and goals. Contact us today to learn more and start making a difference in your community!

Thanks for submitting!

bottom of page