Charitable trusts are a structured way to support beloved causes once you pass away. This can help to provide support for the long term for the charity, which can ensure it can help people during that time. These trusts don’t have to offer support only to the charity. Instead, they can benefit the charity and your beneficiaries.
If you want to provide support to charities, you can do this through a charitable trust in your estate plan. There are two basic forms to consider – charitable remainder trusts and charitable lead trusts.
Charitable remainder trusts
A charitable remainder trust provides an income for your chosen beneficiaries for a specific period of time, which can be set as a certain number of years or until the beneficiaries pass away. Once that time period passes, the remainder of the trust transfers to the charitable organization.
Charitable lead trusts
A charitable lead trust is the opposite of a charitable remainder trust. In the charitable lead trust, the charitable organization has income for a specific period, which is typically set as a number of years. Once the charitable support is completed, the remainder of the trust is passed down to the other beneficiaries.
Charitable trusts are only one part of an estate plan, so other components should also be set up as part of the planning process. Creating a comprehensive estate plan can help to ensure the creator’s wishes are followed. Working with someone who understands those wishes and how to make them legally enforceable is important.
