How it Works
A charitable trust is a legal and financial document which allows you great flexibility in supporting your loved ones, supporting your chosen charities, and reducing income taxes and estate taxes. These benefits depend on the nature of the charitable trust you set up.
A Charitable Remainder Trust provides an income for you and/or any beneficiaries for life or a period of years. At the conclusion of the trust, the charity receives the remainder. In the year you establish the trust you receive an income tax deduction. In a “unitrust,” you or your beneficiary receive a percentage of the trust’s value annually. In an “annuity” trust you receive a fixed payment annually.
A Charitable Lead Trust provides an income to a charity or charities for a period of years. Afterwards, the remainder goes to you or your beneficiaries. In the year you set up this trust you receive a smaller tax deduction.
In establishing charitable trusts you have many opportunities for benefiting those you love and charities you have supported. In practical terms to set up a trust requires at least $50,000, or more efficiently, $100,000. It is imperative that such trusts be a part of your total financial planning.
