Charitable Trust: Why Should I Consider One?

Where you put your money is an important decision. You only have so much of it, of course, so being smart with your investments is the only way to keep your financial future secure and viable. Before making any big financial decision, you should put in the time and, most importantly, the research to help determine if the decision is a good one. When it comes to charitable trusts, the same process should take place. You need to know what you are getting into. In today’s blog post, Davidson Law Group explains why you should look into a charitable trust.

What Is a Charitable Trust?

First off, let’s establish what a charitable trust even is. There a lot of different forms of charitable planning, but in broad terms, a charitable trust is an irrevocable trust to which the unexpired interests are put towards one or more charitable purposes. The advantages of these trusts are wide-ranging with several different avenues of benefits. There are two major types of charitable trusts. There are charitable lead trusts (CLTs) and charitable remainder trusts (CRTs). These two are very similar but do have some key differences.

With a CLT, the charity will receive the income interest for the pre-selected range of years or for that person’s lifetime, with individuals receiving the remainder of the person’s assets. With a CRT, the individuals receive the income interest while the charity receives the remainder.

Related Post: Some Things You Should Know About Charitable Giving

What Are the Advantages?

The biggest advantage of both CLTs and CRTs is that they will help to preserve the value of your highly appreciated assets. So if you have significantly appreciated assets, a CRT allows you to avoid the capital gains tax. On that note, these trusts also offer income tax deductions, although CLTs and CRTs differ in how they go about tax deductions.

Going even further down the tax road, charitable trusts help to reduce estate taxes and gift taxes. These are all beneficial reasons to consider a charitable trust that are also safe and secure ways to get the most out of your assets.

Related Post: An Overview of Charitable Trusts

Let Davidson Law Group Help

At Davidson Law Group, we want to make sure that you get the most out of your assets. A charitable trust is one way to do that. There are several different types of strategies to consider when wanting to get involved with CLTs or CRTs, determined by individual circumstances and factors. We want to help you navigate through those variables. Contact us today in Fort Worth, Allen, or Tyler.