Kathryn T. Joseph & Associates, Inc.
216-245-0504

The use of charitable trusts in estate planning

Ohio residents might like to know how to use charitable trusts as part of an estate plan. Assets in a split interest charitable trust are divided between one or more charities and a non-charitable beneficiary or beneficiaries. There are two types of charitable split interest trusts.

A charitable remainder trust allows a benefactor to donate assets. This trust is best when one has highly valued items or items that do not generate any income. During the term of this trust, there is an annual payout to a beneficiary. The assets pass to the selected charities once the trust's time period has elapsed.

Benefactors can use CRTs to sell assets in a trust without paying capital gains taxes. Real estate or stocks might go into a CRT, and this allows a charity to receive the full market value of the item. A partial income tax deduction might apply with a CRT as one will eventually be donating to a charity.

Charitable lead trusts work by giving a payout to a charity while the remainder goes to a beneficiary once the trust term expires. A donor can select the term of a trust and the annual payout amount. A CLT could also provide a charitable income tax deduction if established during a donor's lifetime.Assets in a trust belong to the trust instead of an individual. This lowers estate taxes and can preserve money for heirs.

Donations are only a small part of estate planning as many people must determine how to leave assets to loved ones and decide who will make decisions in the event one cannot speak for oneself. When leaving an estate behind, trusts allow benefactors to provide instructions for distributing assets. People may wish to consult an attorney when preparing their plans.

No Comments

Leave a comment
Comment Information
Email Us For A Response

How Can We Help You?

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Contact Info

Kathryn T. Joseph & Associates, Inc.
Executive Commons West
29425 Chagrin Blvd.
Suite 305
Cleveland, OH 44122

Toll Free: 888-335-6650
Phone: 216-245-0504
Fax: 216-765-8817
Map & Directions