Should You Include a Charitable Trust in Your Estate Plan?
A charitable trust is a trust created for the purpose of charity. The trustees of a charitable trust are typically appointed by the donor, and they are responsible for ensuring that the trust's funds are used for charitable purposes. Charitable trusts are often used to fund scholarships, hospitals, and other types of charitable organizations.
To learn more about trusts in Illinois, the Glenview trusts attorney at The Livingston Law Office can help.
The Advantages of a Charitable Trust
There are several advantages to setting up a charitable trust, including tax benefits, flexibility, and the ability to make donations anonymously.
a. The Tax Benefits of a Charitable Trust
In Illinois, charitable trusts offer tax benefits to donors; they can provide donors with significant tax deductions. These benefits include a reduction in the donor's taxable income and a reduction in the donor's estate taxes.
b. The Flexibility of a Charitable Trust
A charitable trust can be very flexible, allowing the donor to specify how and when the charity will receive the funds. The trust can also be designed to provide ongoing support to the charity, or it can be set up as a one-time donation.
c. Anonymity When Making Charitable Donations With a Charitable Trust
When making a donation to a charity, many individuals choose to remain anonymous. This is especially true when donating through a charitable trust. This process helps ensure that the donor's name does not appear on any public list of contributors.
Who Is a Charitable Trust Right For?
There are many reasons why people may set up a charitable trust. First, they can ensure that their donations will be used for charitable purposes in the way they intend. Second, a charitable trust can offer tax advantages both during the donor's lifetime and after their death. Third, a charitable trust can provide continuity of a donor's philanthropy beyond their lifetime. Finally, a charitable trust can be an important legacy that a person leaves to their community.
So, is a charitable trust right for you?
There is no one-size-fits-all answer to this question, as the decision of whether or not to set up a charitable trust depends on a variety of factors specific to each individual or organization. However, an important question you should ask yourself is whether setting up this trust is the right way to achieve your charitable goals. There are other options available, such as donating money or property directly to a charity, or gifts to the state for charitable use, that may be more appropriate for your situation.
As such, it is important to consult with an experienced attorney who may assess your estate size, reasons for setting up charitable donations, and potential tax savings, and then give you the best advice that is tailored to your needs.
Need Help With Trusts and Estate Planning?
Giving to charity is often included in estate planning as it provides a way to support causes you believe in while also enjoying some tax benefits. However, as we mentioned above, you need to consult with an Illinois estate planning attorney to find out if it is the right option for you.
At the Livingston Law Office, we offer free consultations and would be happy to discuss all aspects of your estate planning with you. We can help you determine which donation option is best for you. You may reach us at 847-544-6657 to get started.