If you enjoy giving to charity, then you may want to consider doing so through your estate plan. By doing so, your estate can enjoy tax benefits while you ensure that your favorite philanthropic endeavor is supported. With that in mind, let’s look at a couple of ways that you can structure your charitable trust.
Charitable lead trust
This type of trust is what most people think of when they envision a charitable trust. With the charitable lead trust, a portion of your estate’s assets and income are distributed to your named charity over a specified period of time with the rest of your principal assets being left to other named beneficiaries once that period expires. With this type of trust, your estate receives a tax deduction.
Charitable remainder trust
This type of trust is slightly different from the charitable lead trust in that you place assets in the trust and continue to receive payments from the income generated by the assets that are in that trust. If you decide to leave some of that income in the trust, then that income is tax deductible. Once you pass away, then, whatever is leftover in the trust will be distributed to the charity that you identified as the beneficiary.
Fully understand your options before moving forward
You have a lot of estate planning options at your disposal. As such, the process can quickly become overwhelming. But skilled attorneys like those at our firm can help educate you as to your options so that the process doesn’t seem as daunting and you can make the decisions that are right for you, your estate, and your family.