Pairing a Roth Conversion with CRT
Jan 15, 2010 10:35 pm
I'm doing a whole bunch of big Roth conversions, and have been trying to think of some ways to help minimize the tax burden. (I've already been using the multi-Roth strategy.) Had this idea occur to me today. I don't have enough experience with Charitable Remainder Trusts to know whether it's a good one though. I'd be curious to see what you guys think -- 1) Client funds CRT 2) gets a nice fat tax deduction to help offset some of the conversion tax 3) can still receive income from the trust to satisfy retirement income needs 4) uses portion of trust income stream for life insurance premium (lot of assets have been gifted to charity - life insurance is used so the kids still get something) Is this workable, or a lost cause? I know it requires a lot of assets before it's feasible...but I have a handful of clients doing >$1.5M conversions, and still have multi-millions left over.