Article on Split-Interest Charitable Trusts

John R. Strohmeyer (Porter Hedges LLP) recently published an article entitled, Split-Interest Charitable Trusts, 29 Probate & Property No. 1 (January/February 2015).  Provided below is an excerpt from the article:

Generally, the Internal Revenue Code (the “Code”) does not allow a charitable deduction for a gift of a partial interest in property. But the Code allows donors to create split-interest trusts to make a gift of a partial interest in property in trust and receive the IRC § 170(c) charitable deduction. If the donor wants to retain a present interest in property and make a gift of a future interest in property to an organization eligible to receive charitable donations under IRC § 170 (“an IRC § 170(c) organization”), the donor can create a charitable remainder trust (CRT). Alternatively, if the donor wants to make a gift of a present interest in property to an IRC § 170(c) organization, with the donor retaining a remainder interest in the property, the donor can create a charitable lead trust (CLT).