Establishing a charitable trust is an excellent way to preserve important resources and support causes that you value, allowing you to still benefit financially. If these trusts are properly constructed and thoughtfully planned, they may serve as a strong component of any estate plan. They can help you establish a legacy that may last long after you are gone, helping to tell your story and furthering the issues that you care about deeply.
In general, charitable trusts can provide two types of income. These come in the form of either percentage payments or annuity payments. Annuity payments pay out of the trust to the beneficiary on a yearly basis. The amount of the payment is set when you establish the trust. Once you set the amount of the annuity, the law does not allow you to alter it, even if becomes disadvantageous.
Setting the amount of the annuity requires establishing a delicate balance. If you set the payment too high, then you may drain the resources within the trust well before you pass away, which leaves little or nothing for the charity of your choice to receive. If you set the payments too low, then you are simply missing out on income even though your tax advantages are greater.
Establishing a charitable trust as part of your larger estate plan is a strong choice -- one that you should consider very carefully. Make sure to build a strong legal strategy that keeps your rights safe while benefiting your interests and establishing the legacy that you wish to leave behind when you're gone.