Do you have a cause that you really believe in? Most of us do. Perhaps you dream of supporting your favorite charity or non-profit with money, but you aren’t quite as prosperous as the Rockefeller family and don’t feel that you can make a meaningful contribution. As a Brandon Trust Lawyer, I’m happy to tell you that estate planning can help you make more of a difference than you think!
One tried and true way to support your favorite causes without breaking your bank account is to create a charitable trust. There are two primary types of charitable trusts that can help you achieve your goals: a charitable lead trust and a charitable remainder trust.
Charitable Lead Trust
In this type of trust, the charity of your choice receives the interest from your gift for a set period of time. You establish this time period – often people choose 10 or 20 years. At the end of the time period, whatever is left in the trust goes to a non-charitable beneficiary such as your children.
Charitable Remainder Trust
This type of trust is the opposite of a charitable lead trust. This trust sends an annual interest payout to you as the donor and then the assets to the charity at the end of the time period. In this scenario, you would maintain an income if it is invested in an income-producing asset.
It is important to note that the charity that you select must be approved by the IRS. Not every non-profit qualifies as a recipient of a charitable trust.
There are other pros and cons of each type of trust so you should be sure to consult with a qualified charitable trust attorney before taking any action. If you would like to discuss your options, feel free to call our office at (813) 438-8503 and schedule a free consultation.