When many people think of estate planning, they think about passing their most valued possessions and assets to loved ones to treasure after they pass away. However, some people prefer the idea of leaving some or all their assets to a charitable organization. There are several estate planning tools available for you to make a charitable gift.
One possibility is creating a charitable trust and placing assets into a trust to donate to a charitable organization. There are two types of irrevocable charitable trusts: charitable lead trusts and charitable remainder trusts.
- Charitable remainder trust (CRT): If you choose to create a CRT, any income from the trust will go to the creator or beneficiaries until the trust ends, at which point the remaining assets will be given to charity.
- Charitable lead trusts (CLT): If you choose to create a CLT, the charity will receive periodic payments until the trust ends, at which point the remaining assets will be given to your beneficiaries.
You, your loved ones and the charity of your choice may benefit from a charitable trust in many ways. As the creator of the trust, you will be removing assets from your estate and placing them in the trust, which reduces the amount of taxable income you have and can reduce estate taxes on your estate. You will also be able to avoid paying capital gain taxes on stocks and other highly appreciated assets to the trust.
Many people choose to leave a portion or the entirety of their estates to charity for both financial as well as altruistic reasons. If you are interested in creating a charitable trust or exploring other estate planning options, consider speaking to an attorney in the Bridgewater area. Your attorney can help you choose the tools that best suit your needs and make sure your assets go where you want them to go after you pass away.