Charitable remainder trusts are among the most useful and complex estate planning tools. They can be an excellent option when a person hopes to provide financial resources for themselves or their loved ones while still supporting an important charity.
If you are in this position, now is the time to discuss charitable remainder trusts in Covina. A dedicated trusts attorney could answer your questions, advise on your options, and ensure that every aspect of your trust is set up correctly.
What is a Charitable Remainder Trust?
This type of charitable trust is unique in that it allows individuals to not only provide for their heirs but also contribute financial support to the causes they care about. With a Covina charitable remainder trust, the income from the assets set aside by the creator is paid to individual beneficiaries for a set term. Often, these benefits are paid to the creator to cover their basic expenses.
After a certain period or when a milestone occurs, the payments to the identified beneficiaries are no longer made. Instead, whatever is left is forwarded to a charitable entity.
Anyone intending to contribute to a favorite cause can benefit significantly from this approach. The money or assets paid into the trust represent an income tax reduction and can lower the risk of an estate tax obligation.
In addition to the financial benefits of creating this type of trust, it allows a person to make a difference in their community even after they pass away. This approach can also lead to an expanded legacy for the estate creator and their family.
It is helpful to understand that while these trusts are frequently used as part of larger estates, they are a viable option for people at most income levels. A charitable remainder trust is a valuable tool for more than just the ultra-wealthy.
Considerations for Charitable Remainder Trusts
There are several reasons to discuss charitable remainder trusts with a lawyer in Covina. While this planning option can be ideal for many people, some factors must be taken into account. After all, other choices, like charitable lead trusts, could be better choices under certain scenarios.
First and foremost, these trusts are generally irrevocable. That means once they are created, it is difficult to change the terms. This is also a long-term commitment, making it crucial to think carefully before setting aside significant resources for a charity.
Finally, charitable remainder trusts add a level of complexity to the estate planning process. While this should not prevent someone from choosing this option, it is vital to rely on the support of legal counsel when setting up a plan. An attorney could provide helpful insight into when a trust is the best option for supporting a charitable cause.
Talk to a Lawyer in Covina About Charitable Remainder Trusts
You have options when it comes to creating an estate plan that will provide for the non-profits you care about. One of the best approaches is a charitable remainder trust in Covina.
When you rely on this planning tool, you can provide financial resources for yourself and your loved ones before eventually making a substantial gift to your charity of choice. Call today to learn more about this trust option from a seasoned estate planning attorney.
