Creating a family foundation is yet another way to include charitable gifting in your estate plan. This option, however, if best used when you have considerable assets to gift and the time to run the foundation once it is established. The benefits of using a foundation as your charitable gifting vehicle are numerous though, starting with the amount of control you will retain over how your gifts are used. In addition, creating a charitable foundation makes it much easier to involve your children … [Read more...] about What is a family foundation?
A donor advised fund or annuity may also work for your gifting. It works by transferring gifted assets into the fund. Although you will no longer own the assets, you will be able to direct how the funds are used. If you gift to an annuity, you will also be able to choose the beneficiary who will receive the benefits from the annuity. … [Read more...] about What is a donor advised fund?
A charitable remainder trust works just like a charitable lead trust, but in reverse. Trust assets are first distributed to at least one non-charitable beneficiary for a specified period of time with the remainder assets being distributed to at least one charitable beneficiary at the end of the time period. Using that same $1 million, in a charitable remainder trust you might create terms that direct distributions of $20,000 to each of your four children for ten years. After ten years, the … [Read more...] about What is a charitable remainder trust?
A charitable lead trust is structured so that assets from the trust are distributed to at least one charitable beneficiary for a specified period of time first. At the end of that time period, the assets remaining in the trust are distributed to at least one non-charitable beneficiary. For example, imagine that you established a charitable lead trust and transferred $1 million into the trust. The terms might direct distributions in the amount of $50,000 to be made to your chosen charity each … [Read more...] about What is a charitable lead trust?
As the Settlor of your trust you can appoint anyone you choose to be the Trustee; however, given the complex nature of a charitable lead or remainder trust you may wish to consider appointing a professional Trustee. One of the most common mistakes settlor’s make is appointing a family member or close friend as their Trustee without actually considering whether or not the individual is well suited for the position. Given the duties and responsibilities of a Trustee, you should appoint someone who … [Read more...] about How should I choose the Trustee of my charitable trust?
In fact, a trust is frequently used for this purpose because a trust offers a number of advantages that a Will cannot. For instance, you have the ability to retain a significant amount of control over how your designated charity uses the assets you gift through the trust terms you create as the Settlor of the trust. In addition, when you create a trust you choose a Trustee who is responsible for managing the trust and protecting the trust assets, offering additional reassurance that the assets … [Read more...] about Can I use a trust to further my philanthropy?
While making charitable gifts using your Will may be the simplest way to incorporate philanthropy into your estate plan, it may not be the best Gifts made using a Will do not allow you to retain any control over how the gift is used by the beneficiary. Once a gift is made in your Will the funds or assets gifted become the property of the recipient with no strings attached. If it matters to you how your assets are used by the charity, gifting in your Will is not an ideal option. In addition, if … [Read more...] about Can’t I just use my Last Will and Testament to make charitable gifts?