Skip to content
StepUp Law logo StepUp Law

Florida Charitable Remainder Trust

Turn a highly appreciated asset into lifetime income and a big deduction, skip the capital-gains hit, and leave the rest to charity.

Book a free consult Irrevocable trusts

Quick Overview

A Florida charitable remainder trust lets you fund an irrevocable trust with a highly appreciated asset and get one move with three benefits: the trust sells the asset with no capital-gains tax at the sale, pays you an income stream for life or a term of years, and gives you an immediate partial income-tax deduction, with the remainder going to charity. Whether it beats simply selling comes down to your basis, your income needs, and your charitable intent, sorted out below.

Topics to Know HideShow

Below, we walk through the 3 issues that decide whether this is the right move for you. Jump to any one:

  1. How a CRT Works One move, three benefits: an income stream, an immediate partial deduction, and no capital-gains tax at the sale inside the trust. The catch is who pays the gain, and when.
  2. Two Flavors: CRAT and CRUT A CRAT pays a fixed dollar amount each year; a CRUT pays a fixed percentage of the trust value, recalculated yearly. Which fits depends on your income needs and the assets.
  3. Is It Right for You? This is affluent, sophisticated planning, not for every estate. It lines up only when you hold a low-basis appreciated asset, want income, and have real charitable intent.

That’s the quick version. The details below are what decide your situation, and where the costly mistakes hide.

How a CRT Works

You fund an irrevocable trust with an appreciated asset, stock, real estate, a business interest. The trust sells it with no capital-gains tax at the sale, reinvests the full proceeds, and pays you an income stream for life or a term of years (the gain is taxed gradually as those payments reach you, instead of all at once). You take an immediate partial income-tax deduction for the portion projected to pass to charity, and whatever remains at the end goes to the charity you chose. One move, three benefits: income, a deduction, and a tax bill spread over years instead of one painful April.

Two Flavors: CRAT and CRUT

A CRAT pays a fixed dollar amount each year, simple and predictable. A CRUT pays a fixed percentage of the trust’s value, recalculated yearly, so it can grow with the trust and accept additional contributions. We help you pick based on your income needs and the assets.

Holding a low-basis asset you’d hate to sell?

A free 30-minute consult models whether a CRT beats simply selling.

Book your free consult

Is It Right for You?

A CRT fits when you hold a highly appreciated asset, want income from it, face a large capital-gains bill if you sold outright, and have real charitable intent. It is affluent, sophisticated planning, not for every estate, but powerful when the pieces line up. It often pairs with a separate gift or life-insurance trust to replace the value for your heirs, and Florida’s lack of a state income tax makes the income side more efficient.

Frequently Asked Questions

What Is a Charitable Remainder Trust?

A charitable remainder trust (CRT) is an irrevocable trust you fund with appreciated assets, like stock or real estate. The trust can sell those assets without paying capital-gains tax, pays you (or someone you name) an income stream for life or a set term, and whatever remains at the end goes to the charity you chose. You also get an immediate partial income-tax deduction for the value that will eventually pass to charity. It is a way to convert a low-basis, highly appreciated asset into income and tax savings while supporting a cause you care about.

CRAT vs CRUT: What’s the Difference?

Both pay you for life or a term, then leave the rest to charity. A charitable remainder annuity trust (CRAT) pays a fixed dollar amount each year, predictable, but no inflation adjustment and no additional contributions. A charitable remainder unitrust (CRUT) pays a fixed percentage of the trust’s value, recalculated annually, so the payout rises and falls with the trust and you can add to it over time. Which fits depends on your income needs and the assets involved.

Are There Assets That Should Not Go Into a CRT?

Yes, and screening the asset first is half the work. Real estate with a mortgage on it causes serious tax problems inside a CRT, so the debt needs to be cleared before the trust is funded. S-corporation stock is off the table too: a CRT is not a permitted S-corporation shareholder, so funding it with those shares blows the company’s tax election. And timing matters: if a sale is already lined up before the asset goes in, the IRS can treat the sale as yours and tax you on the gain anyway. Contribute first, then sell, and have the funding asset reviewed before anything moves.

Who Is a CRT Right For?

Someone who holds a highly appreciated asset (concentrated stock, a business interest, or real estate), wants income from it, faces a large capital-gains bill if they simply sold it, and has genuine charitable intent. It is a sophisticated, affluent-planning tool, not for everyone, but powerful when the pieces line up. It pairs well with the rest of an estate plan and, often, a separate gift to replace the value for your heirs.

Does a Florida CRT Have Special Advantages?

The federal tax benefits (no capital-gains on the sale inside the trust, the income stream, the charitable deduction) are the same anywhere. Florida adds no state income tax, so the income you receive from the trust is not taxed at the state level, which is part of why these and other trusts are attractive to set up with a Florida connection.

Sources of Law

Updated on July 12, 2026. Reviewed by Kevin D. Klagge, Esq., Fla. Bar No. 99502. Attorney Kevin Klagge represents families, businesses, and international clients in estate planning and international law, with a focus on Florida legal tools. He litigates estate and business issues in court. General information about federal and Florida law, not legal or tax advice; coordinate with your CPA and financial advisor. Do not send confidential information until we have agreed to represent you.