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Tax Preparation

Charitable Trusts

What are Charitable Trusts? 

Charitable Trusts are irrevocable trusts established for charitable purposes. These trusts give Grantors favorable tax benefits, as well as charitable contribution deductions. Additionally, there are two major types of Charitable Trusts: Charitable Lead Trusts and Charitable Remainder Trusts. 

Charitable Lead Trusts

Charitable Lead Trusts are irrevocable trusts designed to reduce a beneficiaries’ tax liability upon inheritance. Charitable Lead Trusts work by donating payments to a charity for a fixed period–of–time before distributing the trust assets to the beneficiary. This helps reduce potential tax liability to the beneficiary, as well as provides them with further tax savings opportunities.

Charitable Remainder Trusts

Charitable Remainder Trusts are tax-exempt and irrevocable trusts that are structured to reduce the taxable income of the individual beneficiaries by first distributing the Trust’s income for a fixed time period and then donating the remainder of the Trust to charity.


What are Trusts? 

Trusts are three-party fiduciary arrangements allowing a trustee to both hold and/or manage assets on behalf of a second party, or beneficiary. Trusts are traditionally used for mitigating estate taxes, but can be arranged in a multitude of ways that specify how and when assets are distributed to the trust beneficiaries.

What are the advantages of Trusts? 

Creators, or grantors, of Trusts may specify the terms of the Trust, and maintain both current and future control of its assets. Properly structured Trusts allow individuals to protect their assets now and after that individuals death. Last, if established as an irrevocable Trust, the Trust may not be considered part of the taxable Estate of an individual, thereby avoiding or reducing Estate taxes due upon death. 

Who qualifies & why should you adopt?

Any individual can create a Trust. Those who want to protect their wealth and privacy, as well as reduce potential Estate or Inheritance taxes, should consider creating a Trust. 

This is not an offer to buy or sell any securities or perform a specific strategy. Please consult your financial advisor before exploring these opportunities. 

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