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Encino Estate Lawyer: Charitable Wills and Trust Can Help You Support Non-Profit Efforts

| Jul 13, 2017 | Estate Planning |

Charity giving

Many people think of the Rockefellers or Carnegies when it comes to the topic of leaving money in trust to charities. But, organizations that are able to do great things lean on the generosity of all of us. That is why as an Encino estate lawyer, I like to remind people that you do not have to be a millionaire to leave part of your estate to your favorite charity.

Many ordinary people like you and me create wills and trusts to support the causes they believe in. If you have a charity that is special to you, you can leave all or part of your estate to them either during your life, or when you pass away.  In addition to setting aside some of your final legacy to donate generously, charitable giving can also provide your heirs with a big tax break. However, it should be noted that once a charitable trust is established, it is irrevocable. This means that you cannot later change your mind and retake control of the trust assets.

The most common type of charitable trust is called a charitable remainder trust. You set up this trust by transferring the assets you want to donate into the trust. The charity must be approved by the IRS which usually means it has tax-exempt status.

When using this type of trust, the charity serves as trustee and manages or invests the property so it will produce income for you. The charity pays you (or whomever you name) a portion of the income generated by the trust for a certain number of years, or your whole life if you so choose. Then, at your death or the end of the period of time, the property goes to the charity.

In addition to helping out your favorite charitable organization or non-profit, you’ll enjoy several big tax advantages. You can take an income tax deduction, the property isn’t subject to federal estate tax and you can turn appreciated property into cash without paying capital gains tax on any profit it might generate.

If you are interested in supporting an organization in this way, be sure to talk with an experienced Encino estate lawyer. The creation of charitable trusts require special planning and specific knowledge so that you and the organization you want to support gets the most benefit.

To find out if a charitable trust is the best way for you to support a cause that you are passionate about, call the our office at (818) 905-6088 and we’ll set up a consultation for you.

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