For some people, philanthropy is part of their everyday life. If you are one of those people, chances are good that you have several charitable causes that are important to you. If so, you may wish to include these charities in your estate plan. Including charitable beneficiaries in your estate plan can be done in several different ways. One of the most popular options is to create a charitable trust. To help you better understand your options, a Lincolnshire living trust attorney explains charitable trusts and why they are often the tool of choice for charitable gifting.
Your Comprehensive Estate Plan
When most people think of creating an estate plan, they focus on passing down their assets to children, grandchildren and other loved ones after they are gone. A comprehensive estate plan, however, can do much more than that. Additional components within your estate plan can help you achieve a wide variety of inter-related goals and objectives, such as incapacity planning, probate avoidance, and Medicaid planning, just to name a few. Charitable gifting is another component that some people choose to include in their comprehensive estate plan. If you do decide to include a charitable gifting component in your estate plan it does not have to be limited to gifting after your death. With a living trust, you can start your gifting while you are here and continue it after you are gone.
Charitable Gifting Alternatives
There are a number of ways in which charitable gifting can be included in your estate plan. The simplest way is to make direct gifts in your Last Will and Testament. Although that may be an easy route, there are a number of drawbacks to using your Will to make charitable gifts. One of those is that you have no control over how the gift is used once it is made. In addition, you will not receive any tax benefits for gifts made after your death. At the other end of the spectrum are options such as donor advised funds and family foundations, both of which can become complicated quickly. A charitable trust provides a nice middle ground for those who wish to make ongoing charitable gifts but who may not have the fortune required to start an entire foundation.
A charitable trust offers a number of benefits for people who wish to make ongoing gifts to charities or who wish to combine gifts to charitable beneficiaries with gifts to non-charitable beneficiaries. Trusts are broadly divided into testamentary and living trusts with the former not taking effect until the death of the Settlor (the creator of the trust) and the latter taking effect as soon as the formalities of creation are in place. If you wish to start your charitable gifting while you are still alive, a charitable living trust is your best option.
One of the many benefits to using a trust is that you appoint Trustee to oversee the trust administration and manage the trust assets. If you appoint a professional Trustee, you can rest assured that your assets are well protected and managed. Your focus can remain on which charities to include as beneficiaries and how and when to distribute the trust assets. Your charitable trust does not have to end upon your death either. You can even set up your estate so that additional assets are transferred into the trust at the time of your death, thereby increasing the charitable gifts your estate makes after you are gone. Some people even choose to create a charitable lead or charitable remainder trust which allows them to gift to both a charitable and a non-charitable beneficiary using just one trust. The charitable beneficiary receives disbursements for a specified period of time and then the remainder is distributed to a non-charitable beneficiary or vice versa. Finally, a charitable living trust is very easy to modify as your charitable gifting habits change over the course of your lifetime.
Contact a Lincolnshire Living Trust Attorney
For more information, please download out FREE estate planning worksheet. If you have additional questions or concerns regarding a charitable living trust, or you wish to get started creating one for your estate plan, contact an experienced Lincolnshire living trust attorney at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.