The New Rules for Charitable Remainder Trusts in 2026

Preston Rosamond |

For many of our clients, charitable giving isn’t just generosity; it’s a strategic component of a sophisticated financial plan. Charitable remainder trusts (CRTs) allow you to receive income during your lifetime, claim a current tax deduction, and leave a lasting legacy for the causes you care about.

 

CRTs remain a highly effective way to share your wealth while enjoying tax advantages. However, upcoming changes under the One Big Beautiful Bill Act (OBBBA) will affect CRTs in 2026. Here’s what every thoughtful planner should know.

A Quick Look at Charitable Remainder Trusts

A charitable remainder trust is an irrevocable trust which allows you or a beneficiary to receive trust income before the remaining trust assets go to a charity of your choice. This is a quick summary of how charitable remainder trusts work:

 

  • You transfer property into the trust and receive an immediate tax deduction.
  • You or another beneficiary receives income payments from the trust for a set term.
  • At the end of the term, assets remaining in the trust go to your chosen charity.

 

In most cases, the trust pays income for either the rest of the beneficiary’s life or for a preset term of up to 20 years.

What New Rules Impact Charitable Remainder Trusts in 2026?

These are some of the OBBBA’s most significant changes affecting CRTs:

There’s a New AGI Floor

Taking full advantage of available tax deductions is a critical part of managing your total tax liability. Unfortunately, one new development reduces charitable deductions for those who itemize.

 

Starting in 2026, there is an adjusted gross income (AGI) “floor” for charitable deductions. You may only deduct contributions in excess of 0.5% of your AGI. For example, if your AGI is $200,000, you may only deduct your charitable contributions above $1,000.

If You’re in the Top Tax Bracket, Your Deductions Are Limited

Are you in the top marginal tax bracket (37%)? Do you itemize deductions? If so, this change could limit the tax benefits of charitable remainder trusts.

 

Starting in 2026, if you’re in the top tax bracket, your charitable deductions only offset your taxes at a 35% rate. A 2% reduction in tax savings might seem trivial, but if you’re someone who makes substantial donations, it adds up quickly.

The Gift and Estate Tax Exemption Is Now Permanent

The OBBBA permanently set the gift and estate tax exemption at $15 million for individuals (and $30 million for married couples), and it’s set to increase with inflation each year.

 

If you are someone who has used charitable remainder trusts to lower the value of your taxable estate, this permanent increase might mean you no longer need to do so. However, charitable giving has monetary and non-monetary benefits regardless of whether your estate is taxable.

Strategic Advice for Charitable Remainder Trusts

If you’re considering establishing a charitable remainder trust, or simply exploring whether it aligns with your wealth strategy, experienced guidance is critical. The intricacies of creating a CRT are significant, and even minor missteps can eliminate the very tax advantages that make this approach so valuable.

 

At The Rosamond Financial Group, we focus on crafting financial strategies as sophisticated and individualized as our clients. We can help you navigate the complexities of charitable remainder trusts, evaluate the potential benefits and risks, and determine if this powerful, tax-advantaged giving strategy fits your goals. Book a free introductory meeting online.

About Preston

Preston Rosamond is a financial advisor and the founder of The Rosamond Financial Group Wealth Management, LLC with over two decades of industry experience. He provides comprehensive wealth management and financial services to successful business owners, corporate executives, and affluent retirees who enjoy simplicity and seek a professional to help them pursue their goals. Preston personally serves his clients with an individual touch, a sincere heart, and his servant’s attitude is evident from the moment you meet him. Learn more about Preston or start the conversation about your finances with him by emailing solutions@rosamondfinancialgroup.com or schedule a call on his online calendar.