After many decades spent on this earth, hopefully everyone feels a sense of gratitude. For the kindness and goodwill that brought them to where they are now, happy and healthy, with some bumps and scrapes gathered along the way. As you prepare to put together an estate plan, one of the appealing aspects of it could be in that you’ll be able to “give back.” To provide for your loved ones and next of kin using the tools of estate planning. One tool one you might be very familiar with is the trust.
Trusts are a great way to move assets between you and a beneficiary. For those who wish to be more charitable with their assets, they’re in luck, as there is a more specific one called a charitable trust. This lets you give some of your assets to a charitable cause (provided the IRS has verified it as a certified charitable cause).
A charitable trust is irrevocable
There is certainly a fair deal of irony in wanting a trust centered around charitable giving to be revoked, but those who wish to give back must stick with their decision. It doesn’t matter if it ends up being a burden for them financially. While there are benefits to irrevocable trusts, if you delight in the idea of updating an estate plan as time passes, this might give you pause. As the Western & Southern Financial Group points out, this might signal a need to get in touch with a financial advisor. Professional counsel from someone who works within estate planning can also be valuable.
How it works: charitable lead trust
One of the principal kinds of charitable trusts is a charitable lead trust, which operates in a few basic steps. First, the assigned charity gets part of the assets that you would put into your trust. Next comes a tax deduction depending on the size of the payment. After that tax deduction occurs, the rest of the assets in the trust release into the metaphorical hands of the charity.
Giving back and setting up a positive future for loved one and next of kin can be a noble pursuit, but perhaps one’s generosity doesn’t end there. Giving to a charity is possible through a charitable trust. In seeking to set one up, one can benefit from speaking with a financial advisor, as well as a legal professional who is well versed in estate planning.