• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • Our Firm
    • About Our Firm
    • Attorney and Staff Profiles
    • Communities We Serve
      • Cook County
        • Barrington
        • Glenview
        • Northbrook
        • Skokie
      • Lake County
        • Gurnee
        • Lincolnshire
        • Riverwoods
        • Vernon Hills
        • Waukegan
  • Services
    • Asset Protection & Business Planning
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Financial Planning Assistance
    • Incapacity Planning
    • IRA & Retirement Planning
    • Legacy Planning
    • LGBTQ Estate Planning
    • Pet Planning
    • SECURE Act
    • Special Needs Planning
    • Trust Administration & Probate
  • Resources
    • Client Resources
      • Free Seminars
      • Estate and Gift Tax Figures
      • Free Estate Planning Worksheet
      • Is Your Estate Plan Outdated?
      • Probate Resources
        • Glenview Probate
        • Lake Forest Probate
        • Lincolnshire Probate
        • Northbrook Probate
        • Vernon Hills Probate
        • Waukegan Probate
    • Frequently Asked Questions
      • Asset Protection
      • Business Succession Planning
      • Estate Planning
      • Families Without an Estate Plan
      • Financial Planning Assistance
      • Legacy Wealth Planning
      • LGBTQ Estate Planning
      • Probate
      • Trust Administration & Probate
      • Trusts
    • Legacy Wealth Planning
    • Published Books
    • Reports
      • Advanced Estate Planning
      • Basic Estate Planning
      • Estate Planning for Niches
      • Trust Administration
  • BLOG
  • Contact Us
  • Review Us

Hedeker Law

Illinois Estate Planning Attorneys

Connect with us today(847) 913-5415

Attend a Free Seminar
Home / Trusts / How Can I Use a Trust for Charitable Gifts?

How Can I Use a Trust for Charitable Gifts?

March 29, 2019Trusts

Lincolnshire trust lawyersIf philanthropy is important to you in your everyday life, you will likely want to include charitable gifts in your estate plan as well. While you can make charitable gifts in your Will, there are a number of reasons why making gifts in your Will is not the best option. Instead, many people choose to use a trust for their charitable gifting. The Lincolnshire trust lawyers at Hedeker Law Ltd. explain how a trust can be used for charitable gifts.

What Is a Trust?

A trust is a legal relationship that entails property being held by one party for the benefit of another. A trust is created by a Settlor (also referred to as a Maker or Grantor), who transfers property to a Trustee, also named by the Settlor. The Trustee holds that property for the benefit of the beneficiaries named in the trust agreement.  All trusts are first divided into one of two categories – testamentary or inter vivos – the latter of which is more commonly referred to as a living trust. A testamentary trust is a trust that arises upon the death of the Settlor and which is typically activated by a provision in the Settlor’s Will.  A living trust is a trust that takes effect as soon as all the formalities of creation are in place. Living trusts are further divided into revocable and irrevocable trusts. As the name implies, a revocable living trust is one that can be modified or revoked by the Settlor at any time and without the need to provide a reason. An irrevocable living trust, once it takes effect, cannot be modified or revoked by the Settlor for any reason.

Using a Trust to Make Charitable Gifts

One of the many benefits to using a trust for charitable gifting instead of making those gifts in your Last Will and Testament is that a trust allows you a considerable amount of control over how and when gifts are distributed to your chosen charities. A trust also offers additional estate planning and financial advantages that making direct gifts in your Will doesn’t offer.  A trust can be used solely to make charitable gifts or a trust can be used to make gifts to both charitable and non-charitable beneficiaries. Trusts that make gifts to both charitable and non-charitable beneficiaries are referred to as “split-interest” trusts.

Charitable Lead and Charitable Remainder Trusts

Creating a charitable lead trust (CLT) or a charitable remainder trust (CRT) is a very popular way to include charitable gifts in your estate plan. CLTs and CRTs are specialized trusts that are specifically structured to make gifts to both charitable and non-charitable beneficiaries within the same trust.

A CLT first makes distributions to a charitable beneficiary for a specific period of time. At the end of the designated time period, the remaining assets, plus any interest that has accrued, are distributed to the non-charitable beneficiary. For example, imagine that you established a CLT trust and funded it with $500,000 in assets. The terms of the trust direct a yearly distribution of $50,000 to your favorite charity for ten years with the remainder to be distributed to your children at the end of the ten year period. Remember, the trust will have earned a considerable amount of interest during the intervening ten years.

A charitable remainder trust (CRT) works in reverse with the non-charitable beneficiary receiving distributions first and the remainder (plus interest) going to the charitable beneficiary. You can also use the life of a person as your defining benchmark. For instance, you could direct yearly distributions of a designated amount from a CRT trust for the life of your child with the remainder to be distributed to a designated beneficiary upon the death of your child.

There is an infinite number of ways you can structure a trust to facilitate the inclusion of charitable gifts in your estate plan. Talk to your estate planning attorney about the best way to include a trust in your overall estate plan.

Contact Lincolnshire Trust Lawyers

Please join us for an upcoming FREE estate planning seminar. If you have additional questions or concerns about including a trust in your estate plan to help with charitable gifting, contact the experienced Lincolnshire trust lawyers at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.

  • Author
  • Recent Posts
Dean R. Hedeker
Dean R. Hedeker
Dean Hedeker is a leading Chicago-area authority on estate and tax planning, business law and investments. A long-time resident of north suburban Lincolnshire, Dean has more than 35-years experience helping business owners and families grow, protect and pass on their hard-earned money through tax planning, estate planning and investment management services.
Dean R. Hedeker
Latest posts by Dean R. Hedeker (see all)
  • How Can I Terminate a Living Trust? - September 24, 2019
  • Is an AB Trust Right for My Estate Plan? - September 12, 2019
  • How Can I Include Philanthropy in My Estate Plan? - September 4, 2019

Other Articles You May Find Useful

Lincolnshire living trust attorneys
How Can I Terminate a Living Trust?
Waukegan estate planning attorney
Is an AB Trust Right for My Estate Plan?
Waukegan trust attorney
Don’t Forget to Name a Successor Trustee
Lincolnshire estate planning attorneys
Can Out of State Property Be Transferred into My Trust?
Waukegan irrevocable trust attorneys
Can I Change the Beneficiary of an Irrevocable Trust?
Waukegan trust administration attorneys
Trust Administration Checklist

Primary Sidebar

FREE ESTATE PLANNING WORKSHEET

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.

  • This field is for validation purposes and should be left unchanged.

Follow Us

  • Facebook
  • twitter
  • link
  • youtube

Testimonials

Client Review
September 8, 2020
    

Dean's knowledge is very comprehensive and current. He not only sees and understands the particular question but he puts it in the context my particular matter and to the overall business and tax environment. Dean has been my attorney for many (over 20) years. I am also an attorney but I would never make a tax, business or financial decision without his extraordinary advice and counsel.

default image
Raymond

Where We Are

LINCOLNSHIRE
1 Overlook Point, Suite 610,
Lincolnshire, IL 60069
Phone: (847) 913-5415

See Larger Map Get Directions

Blog Subscription

  • This field is for validation purposes and should be left unchanged.

Office Hours

Monday8:00 AM - 5:00 PM
Tuesday8:00 AM - 5:00 PM
Wednesday8:00 AM - 5:00 PM
Thursday8:00 AM - 5:00 PM
Friday8:00 AM - 5:00 PM

Map

hedeker_sidbr_map

Footer

  • Advantages of Working With Our Firm
  • About The American Academy
  • Privacy Policy
  • Disclaimer
  • Sitemap
  • Contact Us

Connect with Us

  • Facebook
  • twitter
  • link
  • youtube
footer-logo

Hedeker Law Ltd.
All Right Reseved.

Attorney Advertisement

© 2023 American Academy of Estate Planning Attorneys, Inc.