After years of building a successful business, it’s time to begin transitioning some of those assets into retirement income. Farm Bureau Financial Services can help you set up a charitable remainder trust (CRT) that helps reduce your tax burden, increases your retirement income and allows you to make a generous gift to your favorite charities.

A CRT can convert the full value of your business assets into income-producing investments, without creating a large tax bill.

Current tax laws provide incentives and potential deductions for donations to a CRT. In addition to avoiding taxes on the sale of your business assets, you’re allowed a tax deduction for placing capital assets into a CRT.

A CRT may be an effective solution if you own depreciated business assets; own appreciated land, or investment or business assets; intend to sell your assets to unlock additional retirement income; or want to preserve your estate for your family and heirs.

By establishing a CRT, you may:

Make a substantial gift to your favorite charities

Realize immediate income-tax savings

Avoid tax on the sale of depreciated business assets or appreciated capital assets

Convert a low-yielding property to an investment asset with a potentially higher yield, which may significantly increase your retirement income

Provide financial peace of mind for you and your family

While you’d like to maximize your gifts of assets to charities, you don’t need to diminish the amount of your estate that passes to your children, grandchildren and other heirs. By establishing a separate wealth replacement trust (WRT), you can help ensure that your family is taken care of:

You can use the tax savings and cash flow from the CRT to make annual gifts to the WRT

The wealth replacement trustee uses the gifted funds to purchase a life insurance policy on your life — or a policy on the joint lives of you and your spouse — to replace all or part of the assets that you donated to the CRT

The beneficiaries of the WRT will receive the life insurance proceeds upon your death, which are ordinarily income tax-free and not taxed in your estate

Talk with a Farm Bureau agent today about developing a charitable remainder trust strategy that meets your goals and objectives.