People who are worried about the 10 year rule, requiring beneficiaries of inherited IRAs to withdraw the entire balance within 10 years, can double that time with a CRT beneficiary in front of inheritors.  What if you really have a big IRA and the 10 year rule just isn’t enough of a stretch to help your beneficiary stay out of the top tax bracket?  Or any other reason you care about reducing the negative tax impact from the 10-year rule?

You could use other remaining tax rules to your benefit by setting up a charitable trust.  A charitable trust allows the retirement assets to continue growing tax-deferred, even once the assets are distributed from the retirement account into the CRT. Tax is paid only when the trust distributes income to the beneficiary (often a child or other non-charitable beneficiary).  

Essentially, the charitable trust creates the ability to regain the benefits of a stretch IRA.  The charity is involved at the passing of the initial, non-charitable beneficiary, but it can also occur at the end of a term, for example 20 years from the account owner’s passing.  Whether it is at the end of a beneficiary’s life, or a term, the charity receives the balance of the trust assets at that time.  The only requirement is that the trust is designed to leave 10 percent of the initial contribution to charity.  

The IRS zigs and the planners zag, and we all march on with one common truth.  People who meet with tax planners are the winners and people who do not often lose out.  Plan your tax outcomes!