Trust Planning and Charitable Gifting

While planning your trust, you can choose to distribute money to any number of qualified charitable organizations either in your will or over the course of your life. Although there are a myriad of ways to achieve this, we’ve listed some of the common ways to give charitably through trust planning.

Revocable/Irrevocable Trusts

Revocable and irrevocable trusts are a simple way of providing a donation. Revocable trusts distribute income earned to the grantor, and after death, property is transferred to the beneficiaries. These trusts dictate that provisions can be altered or canceled at the decision of the grantor. Irrevocable trusts, on the other hand, cannot be modified or canceled without the express permission of the beneficiaries.

Charitable Remainder Trusts

A charitable remainder trust is an irrevocable trust which first provides income to beneficiaries for a designated length of time before donating the remainder to a charity. It reduces an individual’s taxable income that permits a trustor to be eligible for a partial tax deduction.

Charitable Lead Trusts

Charitable lead trusts are also irrevocable trusts which provide assets to one or more charities. After the designated length of time, remaining assets are distributed to beneficiaries. This means that you can donate these funds to charitable causes during your lifetime or other designated period, as well as retain assets for other beneficiaries.

Retirement Accounts

Another tax-smart estate planning strategy might include donating retirement assets to charity. Retirement assets tend to be some of the highest-taxed assets in an estate—and also one of the largest pool of assets that many people have.

Even with careful consideration, trust planning is far from simple. For more information about how to incorporate charitable giving into your financial plan, contact Atherton & Associates, LLP.