A charitable trust is a great way to give back to the community or to organizations that have helped you or others. Some people choose to leave behind assets and money to these organizations so that they can have money for research or outreach. Some prefer to give them compensation as a way of saying thank you for the services they provided.
A charitable trust can also be helpful to you by reducing the value of your estate and minimizing your estate and gift taxes. Take for example the charitable remainder trust, which must be funded during your lifetime. You can use this as a financial planning tool, putting assets in it to reduce the value of your estate and guarantee that the organization you love is going to get support from you.
Interestingly, when you name a charity as a beneficiary, you may be honored immediately. Some people like this, because it’s their way of knowing that they’ve done something positive that will continue to help people for many years to come.
What should you do if you want to create a charitable trust?
If you’ve decided to name a charity as one of your beneficiaries, it’s a good idea to talk to your attorney about moving some assets into a trust. An irrevocable trust can’t be revoked once you open it and add assets, so that’s something to talk to your attorney about if you intend to add assets for a specific charity to use later on. There may also be other trusts you can create to give a charity access to benefits now, during your lifetime, if you’d like to see it benefit while you’re still living.