How Can Trusts Be Used to Benefit Charitable Causes After Your Death?

In What Ways Can Charitable Donations Affect My Estate Plan?

In California, the primary focus when considering and implementing an estate plan is preserving your assets and accumulated wealth for the future benefit of your heirs, family, and beneficiaries. However, there are other significant reasons to draft a plan that many families in California embrace: to provide a legacy of philanthropy and the charitable causes you care about.

California’s residents are well known for their generous giving to others, and charitable giving as part of a comprehensive estate plan can continue to benefit the causes you care about after you die.

However, although you desire to help others, you must be aware of all the legalities and develop these plans in concert with your obligations to your family and beneficiaries; this is where a well-versed, experienced, and knowledgeable estate planning lawyer can be an invaluable help in reaching both of these worthy goals.

Additionally, by professionally planning your charitable trust, you may also receive the side benefit of reducing estate taxes.

For example, your qualified and knowledgeable estate planning lawyer could recommend that you leave a significant amount of your retirement assets to charities. These types of assets are commonly taxed the most after death. So, having your estate plan give a part of your retirement assets directly to a charity you care about will also give you and your heirs a possibly significant federal estate tax charitable deduction. This strategic move will lessen estate taxes for your heirs and beneficiaries, and the charity won’t have to pay taxes on your gift.

However, You must note that every estate differs in size and scope, and one way to give to charities may not suit your unique situation; there is no “one size fits all” in proper estate planning.

This is one of the main reasons your professional and experienced estate planning lawyer’s advice and guidance will be invaluable. It will allow you to give to the causes you care about and help those you love to have a sound financial future.

What Types of Trusts Can Benefit My Charities After My Death?

A professional and well-drafted estate plan is strategically designed to provide the means to carry out your precise wishes to distribute your assets. Hence, they benefit your family, business, and the charities you have supported most of your life. Charitable giving can maintain a legacy for you and your surviving family but requires special consideration and planning.

Just a few of the types of charitable giving strategies your skilled lawyer may use are;

• Giving financial (or other types) gifts directly to the causes you care about – This straightforward approach gives your charity immediate help. For example, you could donate cash, assets, securities, and more directly to the charity named. This is a simple transfer and could result in immediate tax benefits.
• By drafting a charitable trust – You can strategically design a charitable trust to benefit your family or heirs financially and the charities you and your family care about.

A professional charitable trust can provide income for your heirs and family in many ways. Still, it can also effectively donate funds, assets, or items (such as vehicles, etc.) to your charity.

For example, a “charitable remainder” trust will give your family income for a specified time. Then, any remaining funds or assets will go to your charities.

• Create a donor-advised funds trust (or DAF) – DAFs allow you to give freely and contribute to a fund and then recommend that specific charity grants be offered at designated times. This is also a simple way to give and yet provides your heirs with immediate tax benefits.
• Set up a private foundation—This is usually done if you have substantial wealth and assets and want to ensure that giving (possibly to multiple charities) is well controlled. A foundation follows exact guidelines for giving and usually involves family or heirs in future philanthropic decision-making.

These are just a few ways to structure your financial and charitable goals. The wise and prudent way to find what’s best for your unique circumstances is to meet with a local, skilled, empathetic, and passionate charitable giving trusts lawyer.

What Are the Two Main Types of Trusts Used for Charitable Giving in California?

Most estate planning lawyers are used to clients wanting to provide for their favored charity. While leaving funds in a Will may be easy, creating a charitable trust may provide benefits before you die.

California, most often, uses two main types of charitable trusts:

• The charitable lead trust – If you draft a charitable lead trust, you will always designate a beneficiary organization or recipient. After this trust has been created, your assets and their value, as well as any dividends generated, will benefit the charity.
• A Charitable Remainder Trust – You must transfer your property (or assets) into the trust’s designated account using a charitable remainder trust. Then, trustees must be named, such as you, another family member, etc., to manage the trust.

Choosing the right financial tool to help your charities at your death can be complex, and trusts are often preferred. But by getting the valuable, well-versed advice of an Elk Grove trusts lawyer, you can be confident that all your options will be made clear to you, and only then can you choose the best way to proceed.

Are There Benefits To Including My Charity In My Estate Plan Using a Trust?

The benefits of leaving a legacy of giving are probably evident to you. Additionally, there can be significant financial benefits, but they are based on your estate’s scope and size.

Just a few of the benefits to you and your heirs may include;

• Tax benefits that could be significant – Charitable giving usually results in major tax advantages, such as income tax deductions, estate tax savings, and avoiding capital gains taxes. Your lawyer will plan your charitable activities to capitalize on these tax benefits while supporting your philanthropic causes.
• Maintaining your family’s values – For many California residents, philanthropy is a lifelong, fulfilling occupation. Continuing this legacy after you pass can maintain a time-honored tradition and leave a valued family legacy.
• Continuing your family’s legacy – Including charitable giving in your estate plan will help foster unity and shared values. Allowing your loved ones to continue following your proud legacy will instill a sense of purpose and responsibility in managing family wealth and benefiting others.

The benefits of charitable giving through trusts are usually a sound decision for you and your family. But always remember that consulting and discussing the overall picture with an Elk Grove charitable giving lawyer is critical to the entire process.

I Need More Information About Charitable Giving In My Estate Plan; How Should I Proceed?

Charitable giving is a worthy and prudent item to include in your estate plan, and some specific types of trusts can be intrinsically a wise and mindful way to reach your goals. However, every estate, financial, and familial situation differs. Therefore, obtaining the personalized estate planning guidance you must have is critical.

The trust lawyers at Cava & Faulkner Attorneys & Counselors at Law have the expertise and resources to fully explain this highly complex subject matter so that you are clear on all your options. Call them today at 916-685-1225 for a free consultation, and they will answer all your questions and concerns.