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Creating a charitable trust can help you leave a positive legacy

On Behalf of | Dec 27, 2018 | Estate Planning And Probate

An estate plan is a way for an individual to create a legacy. The items you leave behind and whom you allocate them to will have a profound impact on how people remember you in the future. If you have significant assets or are deeply attached to a charitable cause, you may want to leave behind something for a nonprofit organization or charity.

Unfortunately, in most traditional estate plans, you are dependent on your executor and heirs to follow through with your wishes to make a donation. That can leave your legacy vulnerable to the greed of other people, which is often unpredictable. Inept handling of your estate, which could lead to diminished assets, could also prevent your legacy from coming to fruition.

No matter how well you know someone, it is difficult to guess how they might react when they have access to or control of a large sum of money. Creating a charitable trust is one way to ensure that your wishes regarding a charitable legacy get followed.

A charitable trust is structurally different than a standard trust

Even if you already have a trust as part of your estate plan, potentially to reduce your tax liability, creating a charitable trust is a good idea if you want to leave money behind for a cause or organization. The charitable trust has a different structure than a standard trust.

One of the most significant considerations is that it does not provide the same kind of tax haven that other forms of trusts can provide. It also typically involves instructions for the trustee to manage or invest the funds and assets within the trust and to donate either a prescribed amount every year or the interest and income that those assets accrue.

Some charitable trusts can exist indefinitely, while others may have an end date, after which the trust assets get distributed to a final party.

The charitable trust protects the assets you want to donate

If you worry about the behavior of your executor and heirs or if you want to ensure that the money you have earmarked for a charity winds up where you want it, the creation of a charitable trust is a wise decision.

Even if your family members choose to contest your estate, they will have a more difficult time getting a judge to overturn the creation of a charitable trust than they will in having the most recent version of your last will adjusted or thrown out.

If you have any reason to suspect that individuals in your family may not approve of your donation to charity, a charitable trust helps ensure that your instructions regarding your assets get followed.