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Charitable trusts an option that offers multiple benefits

| Oct 30, 2020 | Estate Planning |

Benefactors in Florida who are interested in donating money to charity may want to consider setting up a charitable trust. A charitable trust is a way to use liquid assets to donate to or start a charitable organization. The charity holds the assets for a time specified by the benefactor. During this time, the majority of the interest that the assets generate also got to the charity. When a specified amount is given to the charity each year this is known as an annuity. Trusts have an expiration date designated by the donor.

Benefactors can choose between forming a lead trust or a remainder trust. In a lead trust, the donor retains control of the assets. The interest generated by the assets will be given to the charitable organization or may be split between other beneficiaries of the donor. When the lead trust expires, the money goes back to the heirs or beneficiaries specified. A remainder trust is the opposite of a lead trust. In a remainder trust, the organization is in control of the assets for a specified period. When the time expires, the assets go to the charity.

Benefits of setting up a charitable trust include:

  • The ability to help an organization or cause
  • Generous tax breaks for both the benefactor and beneficiaries once the trust expires
  • Leaving a lasting legacy for family members

Those who wish to set up a charitable trust get the benefit of seeing their assets used for a purpose they are passionate about. This can be one of the most rewarding things after a lifetime of hard work. Those who wish to set up a charitable trust should contact a lawyer who specializes in estate planning. They will be able to help set up the trust or develop a charitable organization under the name of the benefactor.

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