The fact that the federal budget deficit is over a trillion dollars is a hot topic in the news, and it is clear to most of us that spending money that you don’t have is something that you can’t do forever. At the same time, societal needs exist, unemployment is high, and there is sufficient wealth in the country but it is concentrated in a tiny number of pockets. Bill Gates and Warren Buffet are among these few, and they have recognized the need for philanthropic giving as a way to address some of the challenges that we face as a society. They issued a challenge recently, calling on the nation’s 400 wealthiest people to give half of their assets to charity, and this ratcheted up public awareness about the need that exists for charitable giving. Obviously the uber-rich are in a different position than most of us, but many people of significant means have the urge to make a difference, and this can be done by the creation of a charitable remainder trust. You simply place assets into the trust and donate it to the charity of your choice, although that charity must be approved by the Internal Revenue Service. The charity acts as trustee and manages the trust, making investments and otherwise protecting the assets therein. You receive payments from the trust, and these can be fixed annuity payments or percentage payments that fluctuate along with the value of the trust. At the end of your life, the assets in the trust are owned by the charity. There are tax benefits to charitable remainder trusts. First, the original donation can be deducted from your income tax over five years, but you have to deduct the anticipated income that you will be getting back from the trust. Second, you do not pay capital gains taxes on appreciated assets placed into the trust. And thirdly, you reduce the overall taxable value of your estate. If you are in a position to make a substantial contribution to charity, charitable remainder trusts are something to consider. There are benefits for you as the donor, and the charity gets a huge boost as well, making it a win-win proposition for all concerned.