More individuals are discovering they can increase their retirement income through what may seem at first an unlikely source: charitable gifts. A certain category of these gifts are known as "life income plans," so called because they pay an income back to the donor. They allow you to take a highly appreciated asset that’s producing little-if any-income, contribute it to charity, and receive back a stream of income that can last for life or for the joint lives of two or more people. Here we examine one of these life income plans-the charitable remainder trust (CRT).

What’s a CRT? It’s a split interest gift, in which the donor, or another individual chosen by the donor, receives income from the trust, with the trust principal (remainder) being distributed eventually to a charity. The income payout from the CRT may last for a term of years-not to exceed 20 years-or it may last for the lifetime of the donor and/or other specified beneficiaries. The trust must make income payouts at least annually. When the trust term expires, the named charity succeeds to the trust principal.

CRTs come in many different forms, but the net income charitable remainder unitrust with a makeup provision (NIMCRUT) and "flip" unitrust are best suited to enhance retirement income.

Be sure to work with your financial advisor and tax attorney when considering the benefits of charitable giving to be certain current laws and regulations are followed. AA!