Why do people create Charitable Remainder Trusts?

Charitable Remainder Trusts are used for many reasons: Their assets generally avoid federal estate tax by removing them from their makers' taxable estates. Non-income-producing assets can be converted into income-producing assets without recognizing a taxable gain. There is no capital gain tax on assets that are sold by the trustee. A meaningful income stream of the trust maker's choosing can be generated by the trust. A significant current income tax deduction is often created that can usually be carried forward for 5 additional years. When Charitable Remainder Trust assets are invested, the resulting income is almost always higher than it would have been before the transfer. This result occurs because the typical asset given to a Charitable Remainder Trust is either a growth stock with a low cost basis, a portfolio of growth mutual funds with a low cost basis, or a portfolio of raw land with a low cost basis, all of which are typically low income producers. After the tax-free sale of these highly appreciated but low income-producing assets, the resulting portfolio can be invested in assets that produce heightened income under the direction and control of the trust maker acting as trustee.