Mark Kohler explains how wealthy people use a charitable remainder unitrust to sell appreciated assets like crypto or real estate tax-free, collect income for life, and leave the rest to charity. The trust acts as a tax-free bucket for reinvestment while protecting assets under IRS Code Section 664.
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So one of the legal loopholes the wealthy use is the charitable remainder unitrust or crut. I love the crut. Out of the many different types of crts because it allows you to be the trustee and continue to invest your proceeds and continue to build a tax free bucket. The CRUD is a special type of irrevocable trust, lets you donate the appreciated assets, the crypto, sell them tax free inside the trust, then receive income for life. You get asset protection, and the remainder of whatever's left after you die goes to charity. Here's how it's structured. So first you're going to create this trust so that you can then transfer your appreciated assets, the crypto, into the trust. So then the trust, which is a charitable trust, is going to sell those assets tax free. The proceeds stay invested inside the trust and you receive a fixed income stream for life. When the trust ends, whatever's left, the remainder, goes to the charity that you designate at the beginning. Think of it like splitting your assets into two parts. The income piece which comes back to you every quarter of every year, and then the charitable remainder each is what goes to a charity later on. It's perfectly legal under IRS code section 664 and used for real estate stock and now crypto.
