Can a charitable trust help meet your goals?

If you are among the few in North Carolina who have taken the time to plan your estate, you should be proud of yourself. Your efforts have the potential to provide your family with a strong and secure future. You may also have created a plan that will relieve your loved ones of the stress of disputes over their inheritance or the burden of trying to determine your wishes if you should become incapacitated and unable to express your desires for medical care.

However, there may be something missing from your estate plan. Like many, you may have a special cause for which you would like to provide after you have passed away. You may believe you do not have enough wealth to make a difference, but with a charitable trust, you may be able to accomplish several of your estate planning goals at once.

Understanding the kinds of charitable trusts

Charitable trusts are a kind of split-interest trust. In addition to having a charity benefitting from its assets, the trust can also provide for your personal beneficiaries. A Charitable Lead Trust provides an income to the charity for a certain number of years then gives the remaining assets to any loved ones you name.

By contrast, a Charitable Remainder Trust, with the charity as its trustee, pays your beneficiaries first then gives the remaining funds to the charity. During the life of the trust, the charity will be responsible for maintaining, investing and protecting the assets with the incentive of benefiting from careful investments when the trust expires.

Seeking legal guidance

While your primary focus may be to assist a cause for which you feel especially dedicated, you may be interested in some ways in which a charitable trust can assist you. In fact, there are several benefits to including a charitable trust in your estate plan, for example:

• Numerous tax advantages
• The ability to diversify your investments
• The establishment of a steady income for yourself or your loved ones
• A feeling of satisfaction from your generosity

Like other kinds of trusts, a charitable trust controls the assets you fund to it according to your specifications. However, a charitable trust is an irrevocable trust, which means you cannot change it or remove its assets once you establish it. This is why it is a good idea to obtain solid legal advice before embarking on such an estate-planning instrument.