What do I need for a Sterling CRT review?

At no cost or obligation, Sterling reviews a CRT using four data points — type of trust, payout rate, current trust value, and age or remaining term information — and provides an analysis of what the income beneficiary would receive from selling the income interest to a third party.

How do I sell my CRT income interest?

An income interest in a CRT is a capital asset that can be sold to a third party, converting future CRT income into a cash payment today. Sterling arranges this process, starting with a complimentary review built from four data points.

How do I decant a CRT?

CRTs are irrevocable by law and generally can't be decanted the way some other trusts can. In practice, selling or exchanging the income interest typically accomplishes the same goal — moving out of a trust structure that no longer fits — and is the path Sterling helps clients pursue.

How do I terminate my CRT?

A CRT generally can't be terminated outright while both the charity and income beneficiary want it to continue. Selling the income interest is the most common way to effectively exit the trust and access its value today.

When a client's irrevocable trust no longer fits their life

When a client feels stuck in an old CRT, Sterling gives you a solution to offer.

Charitable remainder trusts can be powerful planning tools, but over time they can drift out of alignment with a client's goals. Sterling helps you evaluate whether selling, exchanging, or contributing the income interest may create a better fit for your client's reality — with proceeds available for you to reinvest under your ongoing management.

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Overview

CRTs are valuable tools, but they are also highly inflexible.

Charitable remainder trusts (CRTs) offer the ability to defer capital gains, generate an up-front tax deduction, and create an income stream for life or for a set term. But by law, they are irrevocable, which means the key terms cannot be changed once the trust is in place.

Because life circumstances, tax environments, and financial priorities change over time, many CRTs eventually stop fitting the people they were originally designed to serve — and the assets inside them sit outside your reach until the beneficiary acts.

Since 2003, Sterling has reviewed thousands of CRTs and has successfully arranged over a thousand sale and tax-free exchange transactions, working alongside the advisor of record throughout.

"Most clients with CRTs don't understand their full range of secondary planning options; they naturally assume that because their CRT is irrevocable, they're stuck with it for life (or until the end of the trust term)."

NAEPC Journal of Estate and Tax Planning, 2016

Options

Three common paths when a client's CRT is no longer a good fit.

Sell the Income Interest

An income interest in a CRT is a capital asset that can be bought, sold, or exchanged. A sale converts future CRT income into a cash payment today — capital you can help your client redeploy.

Tax-Free Exchange to a New CRT

For beneficiaries who want to reduce taxable income, reshape the income stream, or create benefits for children or other family members, a tax-free exchange to a new CRT with different terms can be an effective alternative.

Contribute the Interest to Charity

In some cases, the best fit may be contributing the income interest to charity, when the beneficiary's goals have shifted and ongoing CRT income is no longer needed.

Clients — and sometimes their advisors — describe this need differently, asking about decanting or terminating an existing CRT. Because CRTs are irrevocable, they generally can't be decanted or terminated outright the way some other trusts can. Selling or exchanging the income interest is typically what actually accomplishes the goal in practice.

Why Clients Change Course

Signals worth raising with a client

Common Life Changes

Need or desire for a lump sum of cash
Desire to transfer additional assets to children
Desire to simplify financial affairs
Birth of a grandchild, remarriage, or divorce
Change in health status or death of a spouse

Planning & Performance Issues

No longer wanting the CRT's taxable income
Administrative costs and burdens
Concern over market volatility
Dissatisfaction with the CRT's performance
Need to revisit old planning assumptions

Complimentary Review

Sterling's complimentary review, built from just four data points.

What the Complimentary Review Covers

At no cost or obligation, and using just four data points, Sterling can review a client's CRT and provide an analysis showing what the income beneficiary would receive from selling the income interest to a third party.

Type of trust
Payout rate
Current value of trust
Age or remaining term information

What to Expect

The process begins with the Complimentary Review. Once Sterling has the necessary information, the review is typically sent within two business days.

A CRT income interest sale or tax-free exchange can typically be completed in two to four weeks after your client decides to proceed.

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Request Your Complimentary Review

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Thank you — Sterling will follow up with your complimentary review, typically within two business days.

Case Studies

Representative CRT case studies.

CRT Income Interest Sale

Regain Control of Assets for Family
Client's Situation Changed Since Creating CRT
Simplification of Financial Affairs
Underperforming NIMCRUT
Change in Health Status
Mortality Risk
Divorcing Couple with a CRT

CRT Tax-Free Exchange

Reduce Taxable Income and Create Future Income Stream for Children
Reduce Taxable Income and Create Immediate Income Stream for Children
Spouse Isn't an Income Beneficiary
Underperforming NIMCRUT

For Your Client

What to share once you've flagged a candidate.

Point your client to Sterling Foundation Management

This page is built for you. Once you've identified a client who may be a fit, share Sterling Foundation Management's client-facing overview, testimonials, and case studies — written directly for CRT holders weighing their options — so they arrive at your review call already informed.

Client Resource