Charitable trusts can provide distinct benefits for both donors (grantors) and charitable causes (beneficiaries). Significant tax advantages make charitable trusts a popular choice for supporting causes you care about, from hunger relief and disaster aid to medical research and education. Charitable trusts also allow trust grantors to specify how each charitable recipient may utilize donated trust assets, offering a way to personalized how funds can impact a cause.

Two Common Types of Charitable Trusts:

There are a number of different ways trust grantors can donate funds or assets to charitable organizations. However, the two most common types of charitable trusts are charitable remainder and charitable lead trusts. Below is a brief overview of how these trusts operate and provide donations to non-profit organizations.

Charitable Remainder Trusts (CRTs) allow for grantors to donate or transfer assets such as cash, stocks, or real estate to the trust, which pays income to the grantor for either a set period or the remaining lifetime of the grantor. Once the income period ends, assets in the trust are then disbursed to the named charitable organizations.

Charitable Lead Trusts (CLTs) allow for a portion of the trust’s assets to be donated to one or more charities of the trust grantor’s choice for a set period of time. Once this period ends the remaining assets are returned to non-charitable beneficiaries, such as the trust grantor’s family.

Considerations for setting up a charitable trust include establishing goals for your estate and desired charity, choosing what assets to include in the trust, and deciding on the payment order (organization or non-charitable beneficiaries first.) Charitable trusts can be legally complex, and many are irrevocable, so it’s crucial to work closely with a trustee like Altruist™ and an estate planning attorney well versed in creating charitable trusts to ensure your wishes are fulfilled via the trust.

Ensuring Your Estate’s Charitable Goals are Properly Fulfilled

Altruist’s™ dedicated trust managers look forward to learning about your specific charitable giving goals and how we can help you implement the charitable trust that’s right for you.