"Giving back" has become an important part of many California residents' lives. As awareness about the needs of charitable giving continues to grow across the nation, people often ask attorneys for advice about efficient methods of charity. Setting up a charitable trust is one way people can give back. Setting up such a trust will also provide you with a few benefits as well.
While wanting to help out your favorite charities is a wonderful concept, creating a charitable trust requires a lot of thought as well as careful planning. Two key issues to think about include the kind of legacy you want to leave behind and the values you would like to pass on to the next generation. The first issue will help you decide what sort of charitable giving you would prefer while the second issue will help guide your descendants and give your family name integrity.
After considering your legacy and values, you will then need to choose the kind of trust that will best suit your needs. In California, you may choose from two types of charitable trusts: the charitable lead trust and the charitable remainder trust. A lead trust means your chosen charities will receive interest from your financial gift for a set length of time. When the term ends, whatever is left of your trust can go to you, your children or other non-charitable beneficiaries.
The remainder trust works a bit differently. At the end of the trust term, your charities will receive the trust's assets. However, until the trust ends, you as the donor will receive the interest on the gift. This allows you to have a little financial security of your own while also giving back to your community.
If you are considering a charitable trust, you should seek more details from an estate planning lawyer, especially if you want to maximize your gift without suffering financial hardships.
Source: Bankrate.com, "Setting up a charitable trust," Julie Sturgeon, accessed June 24, 2016